EX-10.1






Execution Version



ASSET PURCHASE AGREEMENT




by and among




GLOBAL MICROWAVE SYSTEMS, INC.,




THE ALLIED DEFENSE GROUP, INC.,




GMS COBHAM INC.




and




DTC COMMUNICATIONS, INC.




August 19, 2008




1




ASSET PURCHASE AGREEMENT




THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is dated as of August 19, 2008, by and among
GMS Cobham Inc., a Delaware corporation (the “Buyer”), DTC COMMUNICATIONS, INC., a New Hampshire
corporation (the “Parent”), GLOBAL MICROWAVE SYSTEMS, INC., a California corporation (the
“Seller”), and THE ALLIED DEFENSE GROUP, INC., a Delaware corporation (the “Shareholder”). The
Parent, the Buyer, the Seller and the Shareholder are sometimes hereinafter referred to
individually as a “Party” and collectively as the “Parties.”



RECITALS:




A. The Seller is engaged in the development, design, manufacturing, marketing and sale of
miniature and subminiature analog and digital transmitters, receivers and related equipment (the
“Business”).



B. The Seller desires to sell and the Buyer desires to purchase the Business and certain
assets of the Seller on the terms and conditions set forth in this Agreement. To induce the Buyer
to enter into this Agreement, the Seller and the Shareholder are willing to agree to certain
covenants contained in this Agreement. Parent enters into this Agreement for the purposes set
forth herein.



NOW THEREFORE, to effect the transactions contemplated hereby and in consideration of the
mutual covenants, representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the Parties agree as follows:



ARTICLE I

PURCHASE AND SALE OF ASSETS




1.1 Closing. The consummation of the transactions contemplated hereby (the “Closing”)
shall, unless the Parties agree to another date or place, take place at the offices of Baxter,
Baker, Sidle, Conn & Jones, P.A. in Baltimore, Maryland on a date that shall be no later than three
(3) Business Days after the date on which such conditions set forth in Article IV of this Agreement
shall have been satisfied or waived (the “Closing Date”).



1.2 Purchase and Sale. Subject to the terms and conditions of this Agreement, at the
Closing the Seller shall sell and the Buyer shall purchase the Assets (as defined in Section 1.3),
free and clear of all liens, encumbrances and security interests, and the Buyer shall pay to the
Seller the consideration specified in Section 1.4.



1.3 Assets to be Transferred. The following is an identification of the assets to be
transferred to Buyer at the Closing (the “Assets”):



(a) Tangible Assets. All tangible personal property of the Seller, including all
machinery, production equipment, manufacturing and test instructions, manufacturing specifications,
test equipment, tooling, manufacturing jigs, bills of materials, fixtures, computers, office
furniture and equipment and all other vehicles or equipment (the “Tangible Assets”), together with
all of Seller’s books, records and operating data pertaining to the Assets, including books of
account, ledgers, general, financial, accounting and personnel records, files, invoices, customer
and supplier lists, billing records, sales, advertising and promotional literature, manuals and
customer and supplier correspondence (in all cases, in any form or medium);



(b) Intellectual Property. All intangible assets and intellectual property of the
Seller including all goodwill, patents, patent applications, copyrights, copyright applications,
trademarks, trade names (including the “Global Microwave Systems” name and all other names by which
the operations of the Seller may be known), service marks, trademark and service mark applications,
trade dress, logos, domain names, molds and other proprietary designs, computer programs and
software, manufacturing and engineering drawings, manufacturing instructions and product test
specifications, know-how, trade secrets, marketing files, customer lists, email addresses, websites
and telephone numbers (collectively, the “Intellectual Property”); a complete list of (i) all of
the Intellectual Property registered with the U.S. Patent and Trademark Office or any other
government registration authority (state, local or foreign) and (ii) all trade names is set forth
in Schedule 1.3(b);



(c) Inventory. The inventory of the Seller, including supplies, raw materials, work
in process and finished goods (the “Inventory”);



(d) Contracts. Subject to Section 3.5(a) of this Agreement, all right, title and
interest of the Seller in, to and under those contracts and purchase and sales commitments and
orders to which the Seller is a party or by which the Seller or the properties of the Seller is or
may be bound which relate to the Business or the products being manufactured or repaired, including
all contracts and orders providing for the purchase, receipt, sale, sales agency or distribution of
goods, products or services by the Seller, prepaid items, deposits with respect to those contracts
(but excluding all contracts of employment and contracts relating to employees), third party
warranties for the benefit of Seller and all distribution and sales representation agreements to
which the Seller is a party (the “Contracts”);



(e) Contract Bids. Subject to Section 3.5(a) of this Agreement, all outstanding
customer orders and prepayments, pending contract bids and quotations of the Seller made in the
ordinary course of conducting the Business, a complete list of which is included in Schedule
1.3(e);



(f) Government Licenses, Permits and Authorizations. Subject to Section 3.5(a), all
licenses, permits, approvals and other governmental or non-governmental authorizations or consents,
including all product and facility approvals necessary to own all of the Seller’s properties and
assets and to conduct its business as it is now being conducted (collectively the “Licenses” and
each individually a “License”), a complete list of which is set forth in Schedule 1.3(f);



(g) Accounts Receivable. All accounts receivable from customers and other trade
debtors of the Seller;



(h) Leased Real Property. All leases and subleases for land, buildings and
improvements leased by Seller, a complete list of which is set forth in Schedule 1.3(h) the
“Leased Real Property");



(i) Leased Personal Property. All personal property leased by the Seller, a complete
list of which together with a list of the assets subject to such leases are set forth in
Schedule 1.3(i);



(j) Insurance Claims and Rights. To the extent that liabilities relating to insurance
claims and rights under any insurance policy, insurance reserves and accruals, insurance deposits,
reserves, dividends, refunds or premium adjustments and prepayments (“Insurance Claims and Rights”)
are taken into account in determining the Final Working Capital Amount (as defined in Section
1.10), such Insurance Claims and Rights; and



(k) Assignment of Non-Compete. The non-compete provisions set forth in the Stock
Purchase Agreement dated as of November 4, 2005 by and among the Shareholder, the Seller and Sam
Nasiri (the “Stock Purchase Agreement”).



1.4 Purchase Price for the Assets. As consideration for the purchase of the Assets,
the Buyer shall pay to Seller Twenty-Six Million and No/100 Dollars ($26,000,000.00), as adjusted
pursuant to Section 1.10 ( the “Purchase Price”) payable as follows:



(a) $2,500,000 at Closing to Manufacturers and Traders Trust Company as escrow agent (the
"Escrow Agent”), to be paid to Seller pursuant to the Escrow Agreement attached hereto as Schedule
1.4(a) (the “Escrow Agreement”);



(b) $3,350,000 plus all accrued and unpaid interest thereon through the Closing Date to Sam
Nasiri pursuant to the promissory note dated November 1, 2005 made by Shareholder in favor of Sam
Nasiri, as payment in full of Shareholder’s obligation pursuant to such promissory note; and



(c) the remainder to be payable to Seller at Closing (the “Closing Payment”).



1.5 Manner of Payments. All payments of the Purchase Price required to be made
hereunder shall be made by wire transfer to bank accounts designated by the Seller.



1.6 Allocation of Purchase Price. The Purchase Price shall be allocated among the
Assets, in a manner consistent with the requirements set forth in Section 1060 of the Internal
Revenue Code of 1986, as amended (the “Code”) and the Treasury regulations promulgated thereunder,
as set forth in Schedule 1.6. The Buyer and the Seller will each report, on IRS Form 8594
(Asset Acquisition Statement) and any other corresponding state or local form, the federal, state
and local income and other tax consequences of the purchase and sale contemplated hereby in a
manner consistent with such allocation and neither the Buyer nor the Seller shall take any position
inconsistent with such allocation in any federal or state tax return, in any proceeding before any
taxing authority or otherwise. In the event that the allocation is disputed by any Taxing
Authority, the Party receiving notice of the dispute shall promptly notify the other Party hereto,
and Seller and Buyer agree to use their commercially reasonable efforts to defend such allocation
in any audit or similar proceeding. If adjustments are made pursuant to Section 1.10, the
allocation among the Assets shall be revised to reflect such adjustment consistent with applicable
law.



1.7 Assumption of Liabilities. Except as hereinafter provided, the Buyer is not
assuming any liabilities of the Seller and the Buyer shall not be obligated to pay for any
obligations or liabilities of Seller unless such obligation or liability is listed below (the
“Assumed Liabilities”):



(a) The Seller’s liabilities that are taken into account in determining the Final Working
Capital Amount (as defined in Section 1.10);



(b) To the extent that such obligations and liabilities are not Excluded Liabilities pursuant
to Section 1.9, the Seller’s obligations and liabilities which accrue after the Closing pursuant to
any of the Contracts included in the Assets (including but not limited to the real and personal
property leases transferred pursuant to Sections 1.3(h) and 1.3(i)) and the Licenses which are
transferred pursuant to Section 1.3(f);



(c) Seller’s Liabilities for any employee bonuses, vacation pay, sick pay, or other paid time
off accrued prior to the Closing to the extent reflected in the Final Working Capital Amount; and



(d) Product Warranty Claims.



1.8 Excluded Assets. Expressly excluded from the purchase and sale contemplated
hereby and from the definition of the term “Assets” are:



(a) The Seller’s cash and cash equivalents, including the Closing Payment.



(b) The corporate seal, minute books, charter documents, corporate stock record books and
other records that pertain to the organization, existence or share capitalization of the Seller and
duplicate copies of those records included in the Assets that are necessary to enable the Seller to
file its tax returns and reports as well as any of the records or materials relating to the Seller
generally and not involving or relating to the Assets;



(c) The Employee Benefit Plans of the Seller;



(d) All Tax refunds, Tax credits and Tax reductions of the Seller or to which the Seller has
any claims;



(e) Those assets of the Seller that are set forth in Schedule 1.8(e); and



(f) Insurance Claims and Rights other than those included in the Assets pursuant to Section
1.3(j).



1.9 Excluded Liabilities. Expressly excluded from the definition of “Assumed
Liabilities” are the following (the “Excluded Liabilities”):



(a) Any of the Seller’s indebtedness for borrowed money;



(b) Any of the Seller’s or the Shareholder’s Liabilities for expenses or fees incident to or
arising out of the negotiation, preparation, approval or authorization of this Agreement or the
consummation (or preparation for the consummation) of the transactions contemplated hereby,
including attorneys’, accountants’ and financial advisory fees;



(c) Any Liability of the Seller with respect to any Taxes, (it being understood that the Buyer
shall not be deemed to be the Seller’s transferee with respect to any tax liability);



(d) Any of the Seller’s Liabilities pursuant to any Laws, to the extent that such Liabilities
arise in connection with conditions or circumstances existing or arising prior to the Closing;



(e) All Liabilities arising prior to, on or after the Closing under any Environmental Law or
relating to Hazardous Substances (i) in connection with any real property or facility owned, leased
or operated by Seller prior to the Closing Date, including any formerly operated facilities of the
Seller solely to the extent incurred as a result of any act or omission prior to the Closing or
(ii) arising from the disposal, or arranging for the disposal or treatment, of Hazardous Substances
to any third-party or Superfund waste disposal, reclamation or recycling site by Seller to the
extent treated, disposed of, or arranged for, prior to the Closing Date;



(f) Any of the Seller’s Employee Benefit Plans and the Liabilities arising under or related
thereto;



(g) Liabilities, if any, arising as a result of transactions entered into in violation of this
Agreement;



(h) Any Liabilities for product liability arising from the manufacture or sale of products by
the Seller prior to the Closing;



(i) Any Liability of the Seller or the Shareholder to make any payment, whether in cash or
stock, to any employee of the Seller that is contingent upon such employee remaining an employee of
the Seller through any change in control or sale of assets of the Seller or that is otherwise
related to or triggered by such a change in control or sale;



(j) Any Liability arising prior to, on or after the Closing resulting from Seller’s or the
Shareholder’s violation of the Communications Act, the rules and policies of the FCC, or any other
Law, including but not limited to any Liability arising from: (i) Seller’s or the Shareholder’s
failure to obtain FCC Equipment Authorizations for any of Seller’s products (in existence prior to
the Closing) which require FCC Equipment Authorizations under the Communications Act and the rules
and policies of the FCC; (ii) Seller’s or the Shareholder’s failure to obtain any other FCC
license, permit, authorization or approval required under the Communications Act and the rules
and policies of the FCC; (iii) Seller’s or the Shareholder’s use or operation of any equipment or
facilities authorized under any FCC license, permit, authorization or approval in a manner which is
not in accordance with Law, including the Communications Act and the rules and policies of the FCC
(including but not limited to any violation of the Communications Act or the FCC’s rules or
policies related to Seller’s operation of the facilities authorized under Local Television
Transmission Service Station KA86394); or (iv) to the extent not covered by (i)-(iii), any
violations by Seller or the Shareholder of the Communications Act or the rules and policies of the
FCC.



(k) Except as expressly assumed by Buyer under Section 1.7, any Liability relating to the
operation of the Business prior to the Closing; or



(l) Any other Liability of the Seller not expressly assumed by the Buyer under Section 1.7.



1.10 Adjustment of Purchase Price.



(a) Not later than sixty (60) days following the Closing Date, the Seller shall, at the
expense of the Seller and, to the extent requested, with the assistance of the Buyer, prepare and
submit to Buyer a statement setting forth, in reasonable detail, the Working Capital of the Seller
(as defined in this Section 1.10(a)) as of the close of business on the day immediately preceding
the Closing Date (the “Proposed Final Working Capital Amount”). For purposes of this Section 1.10,
the “Working Capital of the Seller” shall have the meaning set forth in Schedule 1.10(a).
In the event that the Buyer disputes the correctness of the Proposed Final Working Capital Amount,
the Buyer shall notify the Seller in writing of its objections within thirty (30) days after
receipt of the statement setting forth the calculation of the Proposed Final Working Capital Amount
and shall set forth, in writing and in reasonable detail, each of the reasons for the Buyer’s
objections. If the Buyer fails to deliver such notice of objections within such time, the Buyer
shall be deemed to have accepted the statement setting forth the calculation of the Proposed Final
Working Capital Amount. The Buyer and the Seller shall endeavor in good faith to resolve any
disputed matters within twenty (20) days after the Seller’s receipt of the Buyer’s notice of
objections. If the Buyer and the Seller are unable to so resolve the disputed matters, the Buyer
and the Seller shall select a nationally known independent accounting firm (which firm shall not
then be providing any services to the Buyer, the Shareholder or the Seller) (the “Working Capital
Independent Accountant”) to resolve the matters in dispute (in a manner consistent with Section
1.10(b)), including the appropriate amount of interest, if any, due on the disputed amount
(determined in accordance with Section 1.10(c) or Section 1.10(d), as the case may be), and the
determination of the Working Capital Independent Accountant in respect of the correctness of each
matter remaining in dispute shall be conclusive and binding on the Buyer and the Seller. The
Working Capital of the Seller as of the close of business on the day immediately preceding the
Closing Date, as finally determined pursuant to this Section 1.10(a) (whether by failure of the
Buyer to deliver notice of objection, by agreement of the Buyer and the Seller or by determination
of the Working Capital Independent Accountant), is referred to herein as the “Final Working Capital
Amount.”



(b) The Proposed Final Working Capital Amount and the Final Working Capital Amount shall be
calculated in accordance with Schedule 1.10(a) and using the significant accounting
policies and accounting practices set forth on Schedule 1.10(b). Without limiting the
generality of the foregoing, the reserves of the Seller used in connection with the determination
of the Proposed Final Working Capital Amount and the Final Working Capital Amount shall be the same
as the reserves set forth on the balance sheet of the Seller dated December 31, 2007, absent a
significant change in circumstances between December 31, 2007, and the Closing Date.



(c) If the Final Working Capital Amount is greater than Four Million Three Hundred Eighty Two
Thousand Dollars ($4,382,000), the excess shall be paid by the Buyer to the Seller by wire transfer
of immediately available funds to an account or accounts designated in writing by the Seller within
five (5) Business Days of the date on which the Final Working Capital Amount is finally determined,
together with simple interest thereon during the period commencing on the Closing Date and ending
on the date of payment (the “Interest Period”) at a rate equal to the 30-day London Interbank
Offered Rate (“LIBOR”) in effect from time to time during the Interest Period.



(d) If the Final Working Capital Amount is less than Four Million Three Hundred Eighty Two
Thousand Dollars ($4,382,000), the deficiency shall be paid by the Seller to the Buyer by wire
transfer of immediately available funds to an account designated in writing by the Buyer within
five (5) business days of the date on which the Final Working Capital Amount is finally determined,
together with simple interest thereon during the Interest Period at a rate equal to LIBOR in effect
from time to time during the Interest Period.



(e) Subject to any applicable privileges (including the attorney-client privilege and the work
product privilege), the Seller shall make available to the Buyer and, upon request, to the Working
Capital Independent Accountant, the books, records, documents and work papers underlying the
preparation of the statement setting forth the Proposed Final Working Capital Amount. Subject to
any applicable privileges (including the attorney-client privilege and the work product privilege),
the Buyer shall make available to the Seller and, upon request, to the Working Capital Independent
Accountant, the books, records, documents and work papers created or prepared by or for the Buyer
in connection with its review of the Proposed Final Working Capital Amount.



(f) If, as finally determined by the Working Capital Independent Accountant, all of the
matters in dispute shall be resolved in favor of the Buyer, then the Seller shall pay all fees and
expenses of the Working Capital Independent Accountant. If, as finally determined by the Working
Capital Independent Accountant, all of the matters in dispute shall be resolved in favor of the
Seller, then the Buyer shall pay all fees and expenses of the Working Capital Independent
Accountant. If, as finally determined by the Working Capital Independent Accountant, the matters
in dispute shall be resolved partially in favor of the Buyer and partially in favor of the Seller,
then the Buyer and the Seller shall each pay one-half (1/2) of the fees and expenses of the Working
Capital Independent Accountant.



ARTICLE II




REPRESENTATIONS AND WARRANTIES




2.1 Representations and Warranties of the Seller and the Shareholder. The Seller and
the Shareholder hereby jointly and severally represent and warrant to the Parent and the Buyer
that:



(a) Corporate Standing and Authority; Binding Agreement. The Seller is a corporation
duly organized, validly existing and in good standing under the laws of California and the
Shareholder is a corporation duly organized, validly existing and in good standing under the laws
of Delaware. The Seller and the Shareholder each have full corporate power to own all of their
properties and assets and to conduct their businesses as they are now being conducted, and neither
their ownership or leasing of property nor the conduct of their businesses requires any of them to
be qualified as a foreign entity in any jurisdiction in which any of them are not qualified, except
where the failure to qualify would not have a Material Adverse Effect. Set forth in Schedule
2.1(a) is a listing of the jurisdictions, if any, where the Seller or any of the Subsidiaries
is qualified as a foreign entity. The execution of this Agreement and the consummation of the
transactions contemplated hereby will not violate any provision of the Articles of Incorporation or
Bylaws of the Seller or the Shareholder, and the Seller and the Shareholder have each obtained all
necessary authorization and approval from their Boards of Directors, shareholders, partners,
members and/or managers, as the case may be, for the execution of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement is a legal, valid and binding
agreement of the Seller and the Shareholder, enforceable against each of them in accordance with
its terms, except that the enforceability hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws or equitable principles generally affecting
creditors’ rights. True, complete and correct copies of the Articles of Incorporation and Bylaws
of the Seller have been made available to the Parent and the Buyer. The Seller has no subsidiaries
or equity interests in any entity.



(b) Absence of Conflicting Agreements or Required Consents. Except as set forth in
Schedule 2.1(b), the execution, delivery and performance of this Agreement by the Seller
and the Shareholder do not and will not: (i) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to any of the Seller or the Shareholder or by which either of
them is bound or affected, (ii) result in any breach of or constitute a default under any note,
bond, mortgage, indenture, lease, license, franchise or other instrument or obligation to which the
Seller or the Shareholder is a party or (iii) require any novation, consent, approval,
authorization or permit of, or filing with or notification to, any governmental or regulatory
authority, domestic or foreign, or any Person not a party to this Agreement.



(c) Financial Statements. The Seller has furnished the Buyer with the following
information with respect to the Seller: (i) the income tax returns for the years ended December 31,
2005, 2006 and 2007; and (ii) unaudited financial statements as at December 31, 2005, 2006 and 2007
and for the fiscal years then ended and the unaudited balance sheet as at June 30, 2008 (the
statements referred to in the foregoing clause (ii) being collectively referred to hereinafter as
the “Financial Statements”). The Financial Statements have been prepared in accordance with U.S.
generally accepted accounting principles (“U.S. GAAP”) consistently applied throughout the periods
indicated, subject to normal recurring year-end adjustments and the absence of footnotes required
by GAAP. The Financial Statements are true, correct and complete in all material respects and
fairly present the financial condition and results of the operations of the Seller as of the dates
and for the periods indicated, and the Seller and the Shareholders acknowledge that the Buyer has
placed considerable reliance on the Financial Statements in the calculation and negotiation of the
Purchase Price.



(d) Corporate Controls. The Seller makes and keep accurate books and records
reflecting its assets and maintains internal accounting controls that provide reasonable assurance
that: (i) transactions are executed with management’s authorization; (ii) transactions are recorded
as necessary to permit preparation of the financial statements of the Seller and to maintain
accountability for its assets; (iii) access to its assets is permitted only in accordance with
management’s authorization; and (iv) the books and records of its assets are compared with its
actual assets at reasonable intervals.



(e) Undisclosed Liabilities. There are no Liabilities of the Seller of any kind,
whether accrued, absolute, contingent or otherwise except: (i) as set forth in Schedule
2.1(e); (ii) as indicated in the balance sheet as of December 31, 2007 or April 30, 2008; or
(iii) Liabilities or obligations arising since December 31, 2007 or April 30, 2008 which: (A) were
incurred in the ordinary and usual course of the business of the Seller consistent with past
practices and in the aggregate do not exceed $50,000, and with respect to any individual item or
group of related items do not exceed $25,000; (B) are of types and in amounts consistent with the
past practices of the Seller; and (C) do not benefit the Shareholder.



(f) Taxes.



(i) The Seller has filed all Tax returns and reports which are required by law to be filed
prior to the Closing and has paid all Taxes due and owing by the Seller (whether or not shown or
required to be shown on any Tax return) and has paid all Taxes which have or may become due
pursuant to those returns and reports, and all assessments made and all other accrued Taxes,
whether or not the returns, reports or payments are yet due. Schedule 2.1(f) sets forth
those income, sales and use, employment and other Tax returns that have been examined by any taxing
authority since December 31, 2003. All filed Tax returns and reports of the Seller are true,
correct and complete in all respects and there is no outstanding claimed deficiency with respect to
any Tax period, no formal or informal notice of a proposed deficiency, no notification of any
pending audit of any Tax returns or reports and no waiver or extension granted by the Seller with
respect to any statute of limitations affecting the assessment of any Tax. The liabilities and
reserves for Taxes in the Financial Statements are sufficient in the aggregate for the payment of
all unpaid federal, state and local Taxes (including any interest or penalties thereon), whether or
not disputed, for which the Seller may be liable in its own right or as transferee of the assets
of, or successor to, any corporation, person, association, partnership, joint venture or other
entity.



(ii) Except as disclosed in Schedule 2.1(f): (a) proper and accurate amounts have been
withheld by the Seller from its employees and others for all prior periods in compliance in all
material respects with the Tax withholding provisions of applicable federal, state and local laws
and regulations, and proper due diligence steps have been taken in connection with back-up
withholding; (b) returns which are true, correct and complete in all material respects have been
filed by the Seller for all periods for which returns were due with respect to income tax
withholding, value added or goods and services taxes and unemployment taxes; and (c) the amounts
shown on such returns to be due and payable have been paid in full or adequate provision therefor
has been included by the Seller in the most recent Financial Statements.



(iii) No audit of any return of the Seller is currently in progress, and the Seller has not
been notified that such an audit is contemplated by any taxing authority. The Seller does not
contemplate the filing of any amendment to any return. The Seller does not have any actual or
potential material liability for any Tax obligation of any taxpayer (including any affiliated group
of corporations or other entities which included the Seller during a prior period). There are no
Tax claims pending or, to Seller’s Knowledge, threatened against the Seller and there are no
material Tax claims threatened to be asserted against the Seller. There are no material issues
which have been raised in prior periods or audits which by application of similar principles are
expected to result in a material Tax claim for any other period.



(iv) Neither the Buyer nor the Parent will be required to deduct and withhold any amount
pursuant to section 1445(a) of the Code upon the transfer of the Assets to the Buyer.



(v) There are no liens for Taxes upon the Assets.



(g) Inventories. The inventory of the Seller: (i) complies with all applicable federal
laws and regulations and with all applicable laws and regulations of each of the states of the
United States in which the Seller does business or into which any product would be shipped directly
by the Seller; (ii) does not contain any Hazardous Substances; and (iii) consists of items of a
quantity and quality historically useable and/or saleable in the ordinary course of business,
except for obsolete and slow-moving items and items below standard quality, substantially all of
which have been or will have been written off or written down on the Financial Statements in
accordance with U.S. GAAP consistently applied prior to or at the Closing. The inventory reflected
in the Financial Statements has been acquired in the ordinary course of business of the Seller in
accordance with its normal inventory practices and is stated in accordance with U.S. GAAP
consistently applied.



(h) Non-Infringement of Patents, Trademarks and Other Intellectual Property. Except
as set forth in Schedule 2.1(h), the Seller is the sole owner of the Intellectual Property
free and clear of all liens, encumbrances and rights of others. The Intellectual Property does not
infringe or violate the rights of any Person. There is no pending or, to Seller’s Knowledge,
threatened claim of infringement or violation of the rights of others with respect to the
Intellectual Property, and, to Seller’s Knowledge, there is no use or exploitation by another
Person which would conflict with the Seller’s claim to ownership of any right to use any of the
Intellectual Property or which is similar to the Intellectual Property so as to create a reasonable
possibility of confusion as to the source of the ownership of any of the Intellectual Property by
any member of the public. Except as set forth on Schedule 2.1(h), neither the Seller nor
the Shareholder has licensed or permitted any other Person to use or exploit any of the
Intellectual Property currently or at any time in the future, and neither the Seller nor the
Shareholder has suffered any such exploitation to exist. The Seller has never been involved in any
controversy with another Person involving the use or exploitation of any of the Intellectual
Property, and there are not any past or present disputes with respect to the Intellectual Property.
Schedule 2.1 (h) sets forth a listing of all registrations in any governmental office or
registry with respect to any of the Intellectual Property. All patents and patent applications of
the Seller have been validly and properly assigned to the Seller by the inventor.



The right of the Seller to use or exploit the Intellectual Property is not dependent upon any
license, permit, grant or agreement, except as set forth in Schedule 2.1(h), and the Seller
owns or licenses all of the Intellectual Property necessary to the conduct of its business as
conducted on the date hereof. Except as set forth on Schedule 2.1(h), neither the Seller
nor the Shareholder is obligated to make any royalty or other payments with respect to any of the
Intellectual Property. The Seller is not in default under any license or sublicense agreement
involving any of the Intellectual Property with a third party. To Seller’s Knowledge, there is no
material defect in any of the Intellectual Property (e.g., including the abandonment of a trademark
or a defect which could give rise to cancellation of a trademark registration or invalidation of a
patent). The actual design of the products of the Seller and the manufacturing processes used
therefor are proprietary to the Seller.



To Seller’s Knowledge, there is no patent, patent application, copyright, copyright
application, trademark, trademark application or other intellectual property right which would
reasonably be expected to be the basis for an infringement claim with respect to the Business.



(i) Operations and Use of Properties. Except as set forth on Schedule 2.1(i),
the operations, business and properties, including leased properties, of the Seller comply in all
material respects with all applicable laws or orders or other governmental or administrative laws,
ordinances, regulations or orders, including zoning, land use and building codes and those relating
to motor vehicle registration, permitting, inspection and operation. The assets of the Seller are
sufficient for the conduct of its business as it is currently conducted and as it is proposed to be
conducted in accordance with Seller’s current commitments.



(j) Licenses, Permits and Authorizations. The Seller in its name has all Licenses,
all of which are listed in Schedule 2.1(j). Each License is valid and in full force and
effect. Except as set forth in Schedule 2.1(j), the continuation, validity and
effectiveness of each License will in no way be affected by the consummation of the transactions
contemplated by this Agreement.



(k)  Insurance. The Seller is covered by valid and currently effective insurance
policies issued in favor of the Seller for such risks and in such amounts which are, in the best
judgment of the Seller after advice from one or more qualified insurance broker(s), customary in
the locales of operation of the Seller for companies operating similar businesses and operations.
Since it commenced operations, the Seller has been continuously insured for product liability risks
with respect to products sold by it and the insurance coverage will continue beyond the Closing
Date for the applicable period of liability with respect to products sold by the Seller prior to
the Closing. The policies of insurance of the Seller in effect since December 31, 2005, are listed
and described in Schedule 2.1(k). All such policies, including any insurance policies
previously maintained by the Seller, provide “per occurrence” coverage. The Seller has never been
denied insurance coverage nor has such coverage been conditioned upon special terms or rates of
premium. Schedule 2.1(k) lists and briefly describes all claims made by the Seller under
insurance policies since December 31, 2005.



(l) Environmental Matters.



(i) The Seller (including its operations, businesses and properties, whether owned or leased,
now or in the past) has been and is in compliance with all applicable Laws implemented and/or
enforced by any ministry, department or administrative or regulatory agency relating to the
protection of the environment, occupational health and safety or the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, discharge, transport or handling of
any pollutants, contaminants, petroleum, chemicals or industrial, toxic or hazardous wastes or
substances (such Laws being hereinafter referred to as “Environmental Laws” and such wastes of
substances being hereinafter referred to as “Hazardous Substances”), except where the failure to so
comply would not reasonably be expected to have a Material Adverse Effect.



(ii) The Seller has obtained all licenses, permits, approvals, consents, certificates,
registrations and other authorizations under Environmental Laws required for the operation of the
business of the Seller (collectively the “Environmental Permits” and individually an “Environmental
Permit”), all of which are described in Schedule 2.1(l). Each Environmental Permit is
valid, subsisting and in good standing and the Seller is not and has not been in violation, default
or breach of any Environmental Permit and no proceeding is pending or, to Seller’s Knowledge,
threatened to revoke or limit any Environmental Permit.



(iii) The Seller has not used or permitted to be used, except in compliance with Environmental
Laws, any of its properties (including the Seller’s Facilities or facilities, or any property or
facility that it previously owned or leased, to generate, manufacture, process, distribute, use,
treat, store, dispose of, transport or handle Hazardous Substances).



(iv) The Seller has never received any notice of or been prosecuted for an offense alleging
non-compliance with any Environmental Laws, and the Seller has not settled any allegation of
non-compliance short of prosecution. There are no orders or directions relating to environmental
matters requiring any work, repairs, construction, investigation, clean up of contamination or
capital expenditures (“Work”) with respect to the Business or any property of the Seller (including
the Seller’s Facilities), and the Seller has not received notice of any of the same and is not
required by Environmental Laws to undertake any Work.



(v) The Seller has not caused or permitted and, to Seller’s Knowledge, there has not been, any
release, in any manner whatsoever, of any Hazardous Substances on or from any of its properties
(including the Seller’s Facilities) or assets or any property or facility that any of them
previously owned or leased, or any such release on or from a facility owned or operated by third
parties but with respect to which the Seller is or would reasonably be expected to have any
liability. All Hazardous Substances and all other wastes and other materials and substances used
in whole or in part by the Seller or resulting from the Business have been used, generated,
disposed of, treated and stored in compliance with all Environmental Laws, except where the failure
to do so would not reasonably be expected to have a Material Adverse Effect. Schedule
2.1(l) identifies all of the locations where Hazardous Substances used in whole or in part by
the Seller have been or are being stored or disposed of.



(vi) The Seller has not received any notice that it is potentially responsible for a federal,
state, municipal or local clean-up site or corrective action under any Environmental Laws. The
Seller has not received any request for information in connection with any federal, state,
municipal or local inquiries as to any sites at which contamination is or is suspected to exist.



(vii) The Seller has delivered to Buyer true and complete copies of all environmental audits,
evaluations, assessments, studies or tests relating to the Seller which have been conducted on
behalf of the Seller or the Shareholder.



(m) Receivables. All accounts receivable, notes receivable and other receivables
reflected in the Financial Statements (the “Accounts Receivable”) have been properly recorded on
the books of the Seller and arose from bona fide transactions in the ordinary course of business
and reflect credit terms consistent with past practices of the Seller. None of the Accounts
Receivable outstanding on the date of this Agreement are, or on the date of the Closing will be, in
dispute or subject to any reduction, offset or counterclaim, subject to the reserve for doubtful
accounts set forth on the Financial Statements.



(n) Employees and Labor Laws.



(i) Labor Disputes. The Seller has not experienced any strikes, lockouts, grievances
or other material labor disputes or demands for recognition of a union as collective bargaining
agent for all or any part of the Seller’s employees, and the Seller is not a party to any
collective bargaining or other labor agreement.



(ii) Employment Agreements. Except as disclosed in Schedules 2.1(n) and
2.1(q)(i) the Seller has no written agreements of employment or oral agreements or
understandings with any employee as to any specific period of employment or any severance
agreements with any employee. There are no oral agreements or understandings with employees, except
as to current salary, including performance incentive programs, or wage rates, and there are no
other oral agreements or understandings involving the employment practices or operations of the
Seller. Schedule 2.1(n) sets forth a list of all arrangements for deferred compensation,
supplemental retirement benefits and change in control/ownership payments to officers, directors,
employees, shareholders or consultants of the Seller.



(iii) Proceedings. No employee of the Seller is presently the subject of a
disciplinary proceeding or is otherwise being considered for termination.



(iv) Collective Bargaining Agreements. No employee of the Seller is covered by a
collective bargaining agreement and the Seller has not made any contracts with any labor union or
employee association or any commitments to conduct, or conducted, negotiations with any labor union
or employee association with respect to any future collective bargaining agreements and there are,
to Seller’s Knowledge, no current attempts to organize or establish any labor union or employee
association with respect to any employees of the Seller or any certification of any such union or
association with regard to a bargaining unit.



(v) Salary. The transactions contemplated by this Agreement will not cause an
increase in the salary or rate of pay of any employee of the Seller, and, except as set forth in
Schedule 2.1(n): (A) no employee of the Seller has been given an increase in salary or rate
of pay in excess of five percent (5%) of such employee’s salary or rate of pay since December 31,
2007; and (B) there are no outstanding commitments for increases in any employee’s salary or rate
of pay.



(vi) Layoffs and Relocations. The Seller has not laid off or relocated any of its
employees within the thirty days prior to the date of this Agreement.



(o) Product Labeling, Product Liability and Product Warranty. The Seller is in
compliance with all Laws relating to product labeling, product safety and public health and safety,
except where the failure to so comply would not reasonably be expected to have a Material Adverse
Effect. The Seller has not received any notice of any claim that any product now or heretofore
offered for sale or sold by the Seller or distributed by the Seller is injurious to the health and
safety of any person or is not in conformity with its specifications or not suitable for any
purpose or application for which it is offered for sale, sold or distributed. Schedule
2.1(o) describes the warranties given by the Seller with respect to its products and sets forth
a description of all Product Liability Claims ever asserted against the Seller with respect to its
products. Except as set forth in Schedule 2.1(o), there are no outstanding returns of any
products from customers of the Seller which have not been recorded in the books of the Seller or
issues relating to products delivered by the Seller that would reasonably be expected to give rise
to any product returns.



(p) Seller’s Contracts. Schedule2.1(p) identifies all of the Contracts in
excess of $25,000, true and complete copies of which, with respect to written contracts, have been
delivered to Buyer and Seller has provided Buyer with a true and complete summary of each oral
Contract in excess of $25,000 (each a “Material Contract” and collectively the “Material
Contracts"). Except as set forth on the attached Schedule 2.1(p), all of the Material
Contracts were entered into in the ordinary course of business. Each of the Material Contracts is
a valid and binding obligation of the parties thereto in accordance with its terms, subject in each
case to bankruptcy, insolvency, reorganization, moratorium and similar laws of general application
relating to or affecting creditors rights and to general principles of equity. Except as set forth
on the attached Schedule 2.1(p), Seller has performed and complied in all material respects
with the provisions of each Material Contract and is not in default under any Material Contract;
and, to Seller’s Knowledge, no other party to any Material Contract is in default thereunder.
Subject to Section 3.5(a), the execution of this Agreement and the consummation of the transactions
contemplated hereby will not violate any provision of any of the Material Contracts and will not
result in or create a right of termination, cancellation or adverse modification of any of the
Material Contracts. The Seller is not a party to any Material Contract which provides for
retrospective price concessions or adjustments or entities the other party thereto to participate
in any retrospective discount or rebate programs, and the Seller has no liability whatsoever to
provide refunds of selling prices to any customer with respect to any products sold or delivered
prior to the Closing. The Seller has not incurred any material obligation to indemnify another
party to a Material Contract under the terms of any Material Contract. The Seller has no
Material Contract with any customer involving sales to that customer that would be expected to
result in a loss to the Seller as determined under U.S. GAAP. Except as set forth in Schedule
2.1(p), there are no Material Contracts or outstanding quotations for the sale of products
which are priced below the Seller’s published prices for the products that are the subject of such
Material Contract or related quotation or not in accordance with the Seller’s or a Subsidiary’s
normal and ordinary practice. Schedule 2.1(p) contains a complete list of (i) all
deliveries of products that the Seller has made since December 31, 2007, which was delivered seven
(7) days or more prior to the due date; and (ii) all prepayments made to the Seller by any of its
customers.



(q) Employee Benefit Plans.



(i) Schedule 2.1(q)(i) lists all employee pension benefit plans (as defined in section
3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)(each a “Pension
Plan”), all employee welfare benefit plans (as defined in section 3(1) of ERISA) (each a “Welfare
Plan”), all specified fringe benefit plans (as defined in section 6039D(d) of the Code and all
executive compensation, retirement, supplemental retirement, deferred compensation, incentive,
bonus, severance, compensation associated with change in control, perquisite, health care, death
benefit, medical insurance, disability insurance, life insurance, vacation pay, sick pay, stock
option, stock appreciation, stock purchase, phantom stock or other equity-based performance or
other employee or retiree benefit or compensation plan, program, arrangement, agreement, policy or
understanding, whether written or unwritten to which the Seller is or has since December 31, 2003,
been a party, or with respect to which the Seller has or may in the future have an obligation, or
that are or have been since December 31, 2003, maintained, contributed to or sponsored by the
Seller for the benefit of any current or former employee, officer or director (such plans,
programs, and arrangements being hereinafter referred to individually as an “Employee Benefit Plan”
and collectively as the “Employee Benefit Plans”). The Financial Statements accurately reflect all
commitments of the Seller with respect to the Employee Benefit Plans to the extent required by U.S.
GAAP.



(ii) The Shareholder has furnished or will furnish Buyer with a complete and accurate copy of
each Employee Benefit Plan document (including, in each case, all amendments) and a complete and
accurate copy of all material documents relating to each such plan, including, if applicable:
(A) each trust agreement, insurance or annuity contract, investment management agreement, custodial
agreement and other agreement relating to the funding of such plan, and all amendments thereto;
(B) the most recent summary plan description and any subsequent summary of material modifications;
and (C) with respect to the ADG Companies 401(k) Plan, the most recently filed annual return
reports (Form 5500 series), including all applicable schedules, and the most recent financial
statements.



(iii) With respect to the ADG Companies 401(k) Plan: (A) the Plan is qualified under section
401(a) of the Code and any trust through which such Plan is funded is exempt from federal income
tax under section 501(a) of the Code; (B) the Internal Revenue Service has issued a favorable
determination as to the qualified status of such Pension Plan and trust under the Code; and (C)
nothing has occurred that would reasonably be expected to materially and adversely affect the
qualified status of such Plan or any trust through which such Plan is funded.



(iv) No asset of the Seller or any Subsidiary is the subject of a Lien arising under section
302(f) of ERISA or section 412(n) of the Code.



(v) All contributions, insurance premiums or payments required to be made or paid with respect
to the Employee Benefit Plans have been made by their respective due dates.



(vi) Except as disclosed in Schedule 2.1(q)(vi), no Employee Benefit Plan, and no
other commitment or agreement, provides for the payment of separation, severance or similar
benefits to any person solely as a result of any transaction contemplated by this Agreement or as a
result of a “change in control”, and the consummation of the transaction contemplated by this
Agreement will not accelerate the time of payment or vesting of, or increase the amount of, any
compensation due to any employee.



(vii) Except as disclosed in Schedule 2.1(q)(vii), the Seller has no liability with
respect to any employee or former employee for post-employment benefits other than as required by
section 4980B of the Code and Part 6 of Title I of ERISA.



(viii) There has been no representation made to or communication with any employee by the
Seller that is not in accordance with the existing terms and limitations of the Employee Benefit
Plans. The Seller has not made any commitment to modify any, or create any other, Employee Benefit
Plan.



(r) Title IV Plans. Neither the Seller nor any entity that is or has ever been a
member of either (i) a controlled group (within the meaning of section 414(b) or (c) of the Code)
or (ii) an affiliated service group (within the meaning of section 414(m) or (o) of the Code) that,
in either case, includes or included the Seller or any Subsidiary or an entity of which the Seller
is a successor (each an “ERISA Affiliate”) has ever maintained a plan subject to Title IV of ERISA.
Neither the Seller nor any ERISA Affiliate has ever had any obligation to contribute to any
“multiemployer plan” (within the meaning of section 4001(a)(3) of ERISA) or a “multiple employer
plan” (within the meaning of section 4063 or 4064 of ERISA) with respect to any of its employees.



(s) Litigation. Except as set forth in Schedule 2.1(s), there are no: (i)
claims, suits, actions, citations, administrative or arbitration or other proceedings or
governmental investigations pending or, to Seller’s Knowledge, threatened against the Seller or to
which the Seller is a party or relating to any of the properties (owned or leased), businesses or
business practices of the Seller or the transactions contemplated by this Agreement; or (ii)
judgments, orders, writs, injunctions or decrees of any court or administrative agency involving
the Seller or affecting their assets or businesses.



(t) Customers. Except as set forth in Schedule 2.1(t), no single customer or
customers group of affiliated customers has accounted for more than ten percent (10%) of the gross
sales of the Seller since December 31, 2005. Except as set forth on Schedule 2.1(t), since
December 31, 2005, no customer of the Seller has terminated or communicated to the Seller the
intention or threat to terminate its relationship with the Seller, or the intention to
substantially reduce the quantity of products or services it purchases from the Seller.



(u) No Side Agreements. Except for this Agreement and the items listed in the
schedules and exhibits hereto, (i) the Seller is not a party to any agreement calling for any
action outside the ordinary course of business; (ii) no agreement or understanding exists calling
for any payment or consideration from a customer or supplier to an officer, director, manager or
shareholder respecting any transaction between the Seller and such supplier or customer; and (iii)
except as set forth in Schedule 2.1(u), no affiliate of the Seller, directly or through any
business concern affiliated with such affiliate, transacts any business with the Seller.



(v) Suppliers and Tooling. Except as set forth on Schedule 2.1(v), there are
no sole or majority source suppliers or subcontractors for any purchased parts or sub-assemblies in
respect of current sales or projected sales by the Seller. Schedule 2.1(v) sets forth
details regarding which, if any, subcontractors hold materials provided to such subcontractor by
the Seller without charge and a list of tooling, jigs, manufacturing instructions, test
specifications and bills of material used in the manufacture of the parts or sub-assemblies that
the Seller procures from suppliers, as well as where it is possible that the Seller would
reasonably be expected to encounter any difficulty in removing or relocating such tooling, jigs,
manufacturing instructions, test specifications and bills of material or where there is any
question regarding the title to such tooling, jigs, manufacturing instructions, test specifications
and bills of material.



(w) Title to Assets. Except for Permitted Liens, there are no liens, claims,
security interests, mortgages, easements, restrictions, charges or encumbrances affecting any of
the assets of the Seller and the Seller has good and marketable title to its assets.



(x) Machinery and Equipment. The machinery and equipment of the Seller is in good
operating condition and repair, ordinary wear and tear and aging excepted, to allow for the
day-to-day operation of the Business consistent with past practices. The machinery and equipment
owned or leased by the Seller as of the Closing will be sufficient for the conduct of the Business
consistent with past practices.



(y) Product Design and Drawings; Absence of Defects. The Seller has sufficient
documentation and other know-how to support the manufacture of the products it manufactured since
December 31, 2005. All products for which orders are currently held by the Seller or which have
been manufactured or subcontracted or sold since December 31, 2005, are supported by current,
complete and up to date drawings, qualification documentation, parts lists and, where appropriate,
manufacturing instructions. There are not any design defects of any products manufactured since
December 31, 2005, that would reasonably be expected to have a Material Adverse Effect or which may
materially and adversely affect the performance or safety of any of the products of the Seller.



(z) Government Contracts.



(i) The Seller has not breached or violated any law, certification, representation, clause or
provision included in any Government Contract and neither the United States Government nor any
prime contractor of the United States Government has notified the Seller in writing that the Seller
has breached or violated any law, certification, representation, clause or provision included in
any Government Contract. Neither the Seller nor any of its employees, has made any improper
payment or inducement to any official of the United States Government.



(ii) To the extent required by any of Seller’s Government Contracts, the pricing, cost
accounting, estimating and procurement systems relating to each Government Contract have been
properly disclosed to the United States Government and are in full compliance with all applicable
laws, regulations, and procedures, including the Federal Acquisition Regulations and the Defense
Acquisition Regulations.



(iii) Neither the Seller, nor any of its employees, is (or has been) suspended or debarred
from doing business with the United States Government or has been declared non-responsible or
ineligible with respect to any Government Contract.



(iv) No money due to the Seller under any Government Contract has been withheld or set off or
has been subject to attempts to withhold or set off.



(v) Except as set forth on Schedule 2.1(z), the Seller is not a party to any
Government Contract that requires the Seller or any of its employees to have been granted any
security or similar clearance by any Governmental Entity.



(aa) Leased Property. Schedule 2.1(aa) sets forth a true and complete list of
each lease of real or personal property (each a “Lease”) under which the Seller is a lessee or
lessor or in connection with which the Seller has made any payments since December 31, 2006. With
respect to any Real Property Lease the Seller enjoys peaceful and undisturbed possession under each
Lease and there is not, with respect to any Lease, any existing event of default, or event which
with notice or lapse of time or both would constitute an event of default, on the part of the
Seller or, to Seller’s Knowledge, on the part of any other party thereto. The real property which
is the subject of each Lease have been maintained in good operating condition and repair, ordinary
wear and tear and aging excepted. Gas, electric, water, sanitary sewer, storm sewer, telephone and
other utility facilities are available at the properties which are the subject of each Lease and
are adequate to service the needs of the business of the Seller as its business is presently
conducted and all governmental, regulatory and administrative bodies have issued such final and
unappealable approvals and permits as shall permit the Seller to connect to, tap into and use such
utility facilities, subject only to the payment of reasonable tap-in fees and use charges.



(bb) FCC Equipment Authorizations. The FCC Equipment Authorizations set forth on
Schedule 1.3(f) and FCC Equipment Authorizations for the products set forth on Schedule
2.1(bb) are the only FCC Equipment Authorizations required to operate the Business in the
manner that it was operated prior to the Closing.



2.2 Representations and Warranties of the Parent and the Buyer. The Parent and the
Buyer hereby represent and warrant to the Seller and the Shareholder that:



(a) Corporate Standing and Authority. The Parent and the Buyer are corporations duly
organized, validly existing and in good standing under the laws of the States of New Hampshire and
Delaware respectively and have full corporate power and authority to conduct their businesses as
they are now being conducted and to enter into and consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby will not violate any provision of the Parent’s or the Buyer’s Certificate of
Incorporation or By-Laws or any law, regulation or ordinance or any provision of any contract,
instrument, order, award, judgment or decree to which the Parent or the Buyer is a party or by
which the Parent or the Buyer is bound. This Agreement is a legal, valid and binding agreement of
the Parent and the Buyer, enforceable against each of them in accordance with its terms, except
that the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws or equitable principles generally affecting creditors’ rights. The Parent
and the Buyer have obtained all necessary authorization and approval of their respective Boards of
Directors for the execution of this Agreement and the consummation of the transactions contemplated
hereby. No consent, authorization, order or approval of any Person, governmental authority or
court is required in connection with the execution and delivery by the Parent or the Buyer of this
Agreement or the consummation by Parent or Buyer of the transactions contemplated hereby.



(b) Consents, Approvals and Authorization. Except as set forth on Schedule
2.2(b) no consent, approval or authorization of, or designation, declaration or filing with, or
notice to any governmental authority, or any lenders, lessors, creditors or others, is required on
the part of Buyer or Parent in connection with the valid execution and delivery of this Agreement
or the transactions contemplated in this Agreement.



(c) Truth of Representations. No representation or warranty of the Parent or the
Buyer in this Agreement and no written statement or certificate executed by the Parent or the Buyer
and furnished or to be furnished to the Seller or the Shareholder pursuant to this Agreement or in
connection with the transactions contemplated hereby contains, or will contain as of the Closing,
any untrue statement of a material fact or omits, or will omit as of the Closing, to state a
material fact necessary to make the statements contained herein or therein, in light of the
circumstances under which it is made, not misleading.



ARTICLE III




CERTAIN COVENANTS




3.1 Negative Covenants of the Seller and the Shareholder Prior to the Closing.
Between the date hereof and the Closing, the Seller shall not, and the Shareholder shall not permit
or cause the Seller to do any of the following without the Buyer’s prior written consent:



(a) Make any change in the compensation, bonuses or benefits payable to any of Seller’s
employees or make any change in its directors, officers or managers; provided,
however, that retention bonuses may be paid to the Seller’s employees by the Shareholder to
the extent that such retention bonuses shall only be obligations of the Shareholder and not of the
Seller or the Buyer;



(b) Enter into any contract or commitment other than in the ordinary course of business unless
the terms of such contract or commitment (including but not limited to pricing terms and financial
margins) are consistent with the terms obtained by the Seller over the previous 12 month period;



(c) Enter into any collective bargaining agreement or create, enter into or amend any Employee
Benefit Plan (unless required to do so by any applicable law governing labor management relations
or Employee Benefit Plans);



(d) Create, assume or incur any encumbrance on any assets other than in the ordinary course of
business;



(e) Sell, assign, lease, exchange or otherwise transfer or dispose of any assets other than in
the ordinary course of business;



(f) Merge or consolidate with or into any other entity or enter in any agreements relating
thereto;



(g) Cancel any debts owed or waive any material claim or right of substantial value, except
for compromises of trade debt in the ordinary course of business;



(h) Make any changes in accounting methods, principles or practices;



(i) Pay, discharge or satisfy any claim, liability or obligation, other than liabilities or
obligations reflected or reserved against the accounts or incurred in the ordinary course of
business or consistent with past practices;



(j) Enter into or renew any lease for real property;



(k) Make any changes to the employment agreements between the Seller and each of Sam Nasiri
and Tom Meyers attached as Schedule 4.2(f);



(l) Lay off or relocate any of Seller’s employees or take any action deemed a plant closing
pursuant to the WARN Act or any similar state or local law or rule.



(m) Engage in any discussion with any party other than Buyer and its representatives
concerning the possible sale of the assets or stock of the Seller or provide any information to any
prospective purchaser or any agent thereof concerning the assets or operations (unless and until
this Agreement is terminated in accordance with the provisions of Section 4.5.).



3.2 Affirmative Covenants of the Seller and the Shareholder Prior to Closing. Between
the date of this Agreement and the Closing, except as otherwise consented to or approved by the
Buyer in writing, the Seller and the Shareholder shall:



(a) Availability of Records. Make available to the Buyer and its counsel, accountants
and other representatives for examination all corporate and financial books and records of the
Seller, the Seller’s Facilities, the customers of the Seller and all other matters reasonably
considered by the Buyer to be relevant to the business and affairs of the Seller (such examinations
to take place during normal business hours in a manner so as not to interfere with the Seller’s
normal business operations);



(b) Operation in Ordinary Course. Operate the business of the Seller substantially as
currently operated and only in the ordinary course and, consistent with that operation, use their
best efforts to preserve intact the present business organization of and the goodwill of the
employees, customers, suppliers and others having business relations with the Seller;



(c) Maintenance of Records. Maintain the books of account, records and files
substantially in the same manner as they are maintained as of the date of this Agreement;



(d) Maintenance of Assets. Maintain the Assets in good working condition and repair,
normal wear and tear and aging excepted, replace all items of machinery and equipment at time
intervals consistent with past practices and replace, consistent with past practices, any of the
assets that may be damaged or destroyed;



(e) Insurance. Maintain and enforce existing policies of insurance or substitute
policies providing reasonably comparable insurance coverage in amounts not less than those in
effect on the date of this Agreement;



(f) Payment of Obligations. Pay obligations under all contracts, agreements, leases,
commitments, understandings, franchises, licenses or similar arrangements as and when they become
due;



(g) Compliance with Laws. Duly comply in all material respects and with all Laws
applicable to the Seller and to the conduct of the Business;



(h) FCC Equipment Authorizations. Use their best efforts to take all actions which
are necessary to obtain grant of FCC Equipment Authorizations for all products of Seller for which
such FCC Equipment Authorizations are required under the Communications Act and the rules and
policies of the FCC, all of which are required to be set forth on Schedule 2.1(bb).



(i) Miscellaneous. Take all required corporate action to effectuate the transactions
contemplated by this Agreement.



3.3 Exclusivity. Unless and until this Agreement is terminated pursuant to Section
4.5, the Shareholder and the Seller shall deal exclusively with the Buyer with respect to the
subject matter of this Agreement and refrain from any discussions with any other Persons expressing
an interest in acquiring the Assets or the Seller.



3.4 Consents. The Parties will use their best efforts to obtain consents (including
any required consents to the assignment or novation of Material Contracts listed in Schedule
2.1(b) and any consents required by a landlord under any of the Leases) of all Persons and
governmental authorities necessary to the consummation of the transactions contemplated by this
Agreement. With respect to the consent required from the FCC for the assignment of Local
Television Transmission Service Station KA86394, such consent shall be obtained by grant of the
required assignment application by Final Order of the FCC prior to consummation.  “Final Order” as
used in the prior sentence shall mean that forty (40) days shall have elapsed from the date of FCC
Public Notice of grant of the assignment application without any filing of any adverse request,
petition or appeal by any third party or by the FCC on its own motion with respect to the
assignment application, or any resubmission of any such application, or, if challenged, such FCC
consent shall have been reaffirmed or upheld and the applicable period for seeking further
administrative or judicial review shall have expired without the filing of any action, petition or
request for further review



3.5 Unassigned Contracts.



(a) No Prohibited Assignments. To the extent any lease, contract or other agreement
or any license, permit or other approval is not capable of being assigned, transferred, subleased
or sublicensed without the consent or waiver of the issuer thereof or a party thereto (other than
the Seller) or any third party (including a government or governmental unit), or if such
assignment, transfer, sublease or sublicense or attempt to assign, transfer, sublease or sublicense
would constitute a breach thereof or a violation of any law, decree, order, regulation or other
governmental edict, this Agreement shall not constitute an assignment, transfer, sublease or
sublicense thereof, or an attempted assignment, transfer, sublease or sublicense thereof.



(b) Reasonable Efforts. The Buyer, the Seller and the Shareholder agree to use
commercially reasonable efforts to obtain the consents and waivers referred to in Section 3.5(a),
and to obtain any other consents and waivers necessary to assign, convey, settle, deliver and
transfer the Assets.



(c) Further Actions. If any consent or waiver referred to in Section 3.5(a) is not
obtained, the Seller and the Shareholder shall use commercially reasonable efforts: (i) to provide
to the Buyer the benefits of the relevant permit, license, approval, lease, contract or other
agreement; (ii) to cooperate in any arrangement, reasonable and lawful as to the Buyer, the
Shareholder and the Seller, designated to afford to the Buyer the benefits of the Business and the
Assets; (iii) to continue with the Buyer to attempt to obtain such consent or waiver.



3.6 WARN. The Seller and the Shareholder shall be responsible for all obligations, if
any, under WARN, applicable regulations thereunder, and any state legislation similar to WARN with
respect to any employment terminations prior to or on the Closing Date and shall indemnify the
Buyer, in accordance with the provisions of Article VII in the event that the Buyer is held liable
for any failure by the Seller or the Shareholder to comply with Seller’s obligations under WARN,
any such similar state legislation or this Section 3.6. The Buyer and the Parent shall be
responsible for all obligations, if any, under WARN, applicable regulations thereunder, and any
state legislation similar to WARN with respect to any employment terminations after the Closing
Date and shall indemnify the Seller, in accordance with the provisions of Article VII in the event
that the Seller is held liable for any failure by the Buyer or the Parent to comply with Buyer’s
obligations under WARN, any such similar state legislation or this Section 3.6.



3.7 Tooling at Subcontractors. At the request of the Buyer, the Seller and the
Shareholder shall use their best efforts to have any Person in possession of toolings, castings or
jigs that are a part of the Assets deliver such toolings, castings or jigs to Buyer or a designee
of Buyer following the Closing.



3.8 Bulk Transfer Laws. Buyer acknowledges that Seller has not taken, and does not
intend to take, any action required to comply with any applicable bulk sale of bulk transfer Laws
or similar Laws. Seller and the Shareholder agree to indemnify and hold Buyer and Parent harmless
from and against any and all Liabilities incurred that arise out of or result from the failure of
Seller or the Shareholder or Buyer to comply with or perform any actions in connection with the
provisions of any such Law in jurisdictions applicable to the transactions contemplated by this
Agreement.



3.9 Collection of Accounts Receivable. Seller shall promptly forward to Buyer any
monies, checks or instruments received by Seller after the Closing with respect to the Accounts
Receivable.



3.10 CFIUS Notification. Seller and Buyer shall cooperate in the preparation and
submission of a joint voluntary notice of the transaction to CFIUS and any requested supplemental
information (collectively, the “Joint Notice") pursuant to Section 721 of Title VII of the Defense
Production Act of 1950, ch. 932, 64 Stat 798, amended by Section 5021 of the Omnibus Trade and
Competitiveness Act of 1988 (Public Law 100-418), the National Defense Authorization Act for Fiscal
Year 1993 (Public Law 100-418), the Foreign Investment and National Security Act of 2007, (Public
Law. 110-49)(“Exon-Florio") and 31 C.F.R. Part 800 (the “Regulations”). Buyer shall bear the
expenses of and take the lead in preparing the Joint Notice. Seller shall provide for inclusion in
the Joint Notice all statements and information required from Seller or the Business under the
Regulations. Buyer shall not prefile or file any such joint Notice without Seller’s consent.
Buyer shall take the lead in responding to any post-filing requests from CFIUS or any Governmental
Authority that may relate to representations or proposed agreements by Buyer. Seller shall take
the lead in responding to any post-filing requests from CFIUS or any Governmental Authority that
may relate to representations or proposed agreements by Seller. Seller and Buyer shall keep one
another informed in a timely manner of communication with any CFIUS or Governmental Authority with
respect to the Joint Notice and each shall provide the other the opportunity to participate in such
communication.



3.11 DSS Notification. The Parent shall prepare and submit to DSS and, to the extent
applicable, any other agency of the United States Government, notification of the transactions
contemplated by this Agreement pursuant to the NISPOM and any other applicable national or
industrial security regulations, and Seller and the Shareholder shall fully cooperate with Buyer
and Parent in requesting from DSS approval to operate the Business pursuant to the Parent’s SSA.



3.12 Employees. Prior to the Closing Buyer shall have offered continued employment
effective as of the Closing Date to all individuals who are employees of the Seller and actively at
work at Closing with titles, job descriptions and rates of basic salary or wages which are
substantially similar to those applicable to such employees immediately prior to the Closing Date.
Without limiting the generality of Section 9.5, nothing in this Section 3.12, express or implied,
is intended to constitute an amendment to any Employee Benefit Plan or confer on any Person other
than the Parties hereto or their respective successors and assigns any rights, remedies,
obligations or Liabilities under or by reason of this Agreement.



3.13 Supplemental Information. From time to time prior to the Closing, Seller shall
promptly disclose in writing to Buyer any matter hereafter arising which, if existing, occurring or
known at the date of this Agreement would have been required to be disclosed to Buyer or which
would render inaccurate any of the representations, warranties or statements set forth in Section
2.1 hereof. If any such matter would require any change in the Schedules if the Schedules were
dated as of the date of the occurrence or discovery of any such fact or condition, Seller shall,
prior to the Closing Date, deliver to Buyer a supplement to the Schedules specifying such change.
Notwithstanding the foregoing, in the event that such supplemental information disclosed involves
an event or occurrence which has had or could have a Material Adverse Effect on the Business, Buyer
and Parent shall have the right to terminate this Agreement. If the Agreement is not terminated,
upon the Closing all such matters which have been disclosed in writing to Buyer and updated on the
Schedules shall be deemed accepted by Parent and Buyer.



3.14 Licenses and Permits. Seller shall use its best efforts to transfer all Licenses
to Buyer prior to the Closing. After the Closing Buyer and Parent shall be responsible for
obtaining all Licenses which cannot be transferred by Seller and Seller shall assist Buyer and
Parent as reasonably requested by Buyer and Parent.



ARTICLE IV




CLOSING CONDITIONS




4.1 The Seller’s and the Shareholder’s Conditions to Closing. The obligations of the
Seller and the Shareholder to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction (or waiver) of the following conditions:



(a) Representations and Warranties. The representations and warranties of Parent and
Buyer set forth in Section 2.2 shall be true and correct in all material respects (except that
representations and warranties which are qualified by materiality shall be true and correct in all
respects) as of the date of this Agreement and as of the Closing as though those representations
and warranties had been made at and as of that time and the Seller and the Shareholder shall have
received at the Closing a certificate signed by a duly authorized officer of each of the Parent and
the Buyer to that effect.



(b) No Litigation. There shall not have been instituted or, to the knowledge of the
Buyer, threatened against the Parent or the Buyer on or before the Closing any action or proceeding
to restrict or prohibit consummation of the transactions contemplated by this Agreement and the
Seller and the Shareholder shall have received at the Closing a certificate signed by a duly
authorized officer of the Parent and the Buyer to that effect.



(c) Resolutions. The Seller and the Shareholder shall have received certified copies
of: (i) resolutions of the Board of Directors of each of the Parent and the Buyer authorizing the
transactions contemplated by this Agreement; (ii) the Certificate of Incorporation and By-Laws of
each of the Parent and the Buyer; and (iii) an incumbency certificate setting forth the officers of
the Parent and the Buyer authorized to execute and deliver all agreements and documents to be
executed and delivered at the Closing.



(d) Assignment and Assumption Agreement. The Buyer shall have executed and delivered
to the Seller an instrument assuming the Assumed Liabilities (the “Assignment and Assumption
Agreement”).



(e) Escrow Agreement. Buyer, Seller and the Escrow Agent shall have executed the
Escrow Agreement substantially in the form attached as Schedule 1.4(a).



4.2 The Buyer’s Conditions to Closing. The obligations of the Buyer to consummate
the transactions contemplated by this Agreement shall be subject to the satisfaction (or waiver) of
the following conditions:



(a) Representations, Warranties and Covenants. The representations and warranties of
the Seller and the Shareholders set forth in Section 2.1 shall be true and correct in all material
respects (except that representations and warranties which are qualified by materiality shall be
true and correct in all respects) as of the date of this Agreement and as of the Closing as though
those representations and warranties had been made at and as of that time and the Buyer shall have
received at the Closing a certificate to that effect signed by a duly authorized officer of the
Seller and of the Shareholder. The covenants contained in Article III shall have been performed or
complied with, as the case may be, and the Buyer shall have received at the Closing a certificate
to that effect signed by a duly authorized officer of the Seller and of the Shareholder.



(b) No Litigation. There shall not have been instituted or, to Seller’s Knowledge,
threatened against the Shareholder or the Seller any action or proceeding to restrict or prohibit
consummation of the transactions contemplated by this Agreement and the Buyer shall have received
at the Closing a certificate to that effect signed by a duly authorized officer of the Seller and
the Shareholder.



(c) Consents, Approvals, Licenses and Permits. Any and all consents listed on
Schedule 4.2(c) shall have been duly executed by the Person required to provide such
consents and shall have been delivered to the Buyer and Buyer shall have obtained all approvals,
certificates, Licenses and Permits listed on Schedule 4.2(c).



(d) Resolutions. The Buyer shall have received certified copies of: (i) resolutions of
the Board of Directors, and shareholders if necessary, of the Seller and the Shareholder; (ii) the
Articles of Incorporation and By-Laws of the Seller and the Shareholder; and (iii) an incumbency
certificate setting forth the officers of the Seller and the Shareholder authorized to execute and
deliver all agreements and documents to be executed and delivered at the Closing.



(e) Material Adverse Effect. Since the date of this Agreement through the Closing,
there shall have not been any change, event or condition of any character (whether or not covered
by insurance) which has had or would reasonably be expected to have Material Adverse Effect and the
Buyer shall have received at the Closing a certificate to that effect signed by a duly authorized
officer of the Seller and of the Shareholder.



(f) Employment Agreements. The Employment Agreements attached hereto as Schedule
4.2(f)) (the “Employment Agreements”) by and between Seller and each of Sam Nasiri and Tom
Meyers shall have been assigned to Buyer.



(g) CFIUS Approval. The Buyer shall have obtained written confirmation from CFIUS of
the successful completion of the review process under Exon-Florio with respect to the transactions.



(h) Release of Liens. The Seller and the Shareholder shall have taken all actions
necessary to ensure that all Liens on the Assets have been removed at or prior to the Closing.



(i) Assignment of Intellectual Property. The Seller and the Shareholder shall
deliver all documents necessary, in the Buyer’s reasonable judgment and discretion, to transfer all
of the Intellectual Property.



(j) Name Change. The Seller shall have adopted an amendment to its charter changing
the Seller’s name so that it does not include the words Global Microwave Systems and shall have
executed and delivered to the Buyer a certificate of amendment to the Seller’s charter in a form
that is appropriate for filing with the California Secretary of State.



(k) Conveyances. The Seller shall have duly executed and delivered to the Buyer
instruments as required under this Agreement and reasonably satisfactory in form and substance to
the Buyer and its counsel, including a Bill of Sale conveying good and marketable title to all of
the Assets.



(l) Product Liability Insurance. The Seller shall have obtained at its own expense
product liability insurance which shall cover claims which relate to products sold or manufactured
on or prior to the Closing and which names Buyer as an additional insured.



(m) DSS Approval. Approval of DSS to operate the Business pursuant to the Parent’s
SSA shall have been obtained.



(n) Assignment of Non-Compete. Seller and the Shareholder shall have assigned their
rights under the non-competition provisions of the Stock Purchase Agreement to Buyer.



(o) FIRPTA Certificate. Seller and the Shareholder shall, prior to the Closing Date,
provide Buyer with properly executed FIRPTA certificates in the form set forth in Treasury
Regulations that indicate that neither the Seller nor the Shareholders is subject to withholding
under Code Section 1445.



(p) Sam Nasiri Waiver. Buyer and Parent shall have received a waiver from Sam Nasiri
in the form attached hereto as Schedule 4.2(p).



(q) Escrow Agreement. Buyer, Seller and Escrow Agent shall have executed the Escrow
Agreement substantially in the form attached as Schedule 1.4(a).



(r) Payoff of Security Interest. Buyer shall have received proof, satisfactory to it
in its reasonable judgment, that the security interest in all of Seller’s assets granted to
Portside Growth & Opportunity Fund has been released.



(s) Best Efforts to Satisfy Conditions. The Parties will use their best efforts to
promptly secure the satisfaction of the conditions to the Closing.



4.3 Waiver of Conditions. The Seller, the Shareholder and the Buyer may, at their
respective options, waive any conditions to their respective obligations to consummate the
transactions contemplated by this Agreement.



4.4 Termination of Agreement. This Agreement may be terminated at any time prior to
the Closing:



(a) by written agreement of the Parties;



(b) by the Buyer if there has been a material violation or breach by the Seller or the
Shareholder of any of their covenants, agreements, representations or warranties contained in this
Agreement which has not been waived by the Buyer in writing or if there has been any event or
occurrence which has rendered the satisfaction of a condition to the obligations of the Buyer
hereunder impossible (which has not arisen as a result of a breach by the Buyer of any of its
obligations hereunder) and such condition has not been waived by the Buyer in writing;



(c) by the Seller or the Shareholder if there has been a material violation or breach by the
Buyer or Parent of any of their covenants, agreements, representations or warranties contained in
this Agreement which has not been waived by the Seller or the Shareholder in writing or if there
has been any event or occurrence which has rendered the satisfaction of a condition to the
obligations of the Seller or the Shareholder hereunder impossible (which has not arisen as a result
of a breach by the Seller or the Shareholder of their obligations hereunder) and such condition has
not been waived by the Seller or the Shareholder in writing;



(d) by the Buyer if it determines in good faith that there has been a Material Adverse Effect;
or



(e) by any Party if the Closing shall not have occurred on or before August 31, 2008 unless
such failure to consummate the transactions contemplated hereby has arisen as a result of a breach
by such Party of its obligations hereunder.



4.5 Procedure Upon Termination. In the event of termination by the Buyer or the
Seller or the Shareholder pursuant to Section 4.4, written notice thereof shall forthwith be given
to the other Parties and the obligation of the Parties to consummate the transactions contemplated
by this Agreement shall be terminated without further action by the Parties. If consummation of
the transactions contemplated by this Agreement is terminated as provided herein:



(a) Each Party, if requested, shall redeliver all documents, work papers and other material of
any other Party relating to the transactions contemplated hereby, whether so obtained before or
after the execution hereof, to the Party furnishing the same;



(b) All confidential information received by any Party with respect to the business of any
other Party shall not be used or disclosed to another Person to the detriment of any other Party
consistent with the provisions of Section 9.12; and



(c) No Party and none of its directors, officers, stockholders, partners, affiliates or
controlling Persons shall have any liability or further obligation to any other Party, except with
respect to any breaches occurring prior to the date of such termination.



ARTICLE V




CLOSING




5.1 The Buyer’s Closing Deliveries. The following items shall be delivered to the
Seller and the Shareholder at the Closing:



(a) Closing Payment. The Closing Payment.



(b) Documents and Certificates. The certificates required by Section 4.1(a) and
Section 4.1(b).



(c) Miscellaneous. All documents and agreements or certificates requested to be
executed or delivered by the Buyer pursuant to Article III or Section 4.1.



5.2 The Seller’s and Shareholder’s Closing Deliveries. The following items shall be
delivered to the Buyer at the Closing:



(a) Documents and Certificates. The certificates required by Section 4.2(a) and
Section 4.2(b).



(b) Miscellaneous. All documents, agreements or certificates requested to be executed
or delivered by the Shareholder, the Seller or the Subsidiaries pursuant to Article III or Section
4.2.



(c) Employment Agreements. The Employment Agreements.



(d) Transfer of Assets. All of the Assets shall be transferred to the Buyer at the
Closing. The Seller shall deliver to the Buyer: (i) all documents necessary in the reasonable
judgment of the Buyer to transfer title to the Assets to the Buyer; (ii) a duly executed and
acknowledged assignment with respect to the interests of the Seller in the Leases; and (iii) such
other documents as the Buyer reasonably requests to effect Closing and transfer of title to the
Assets.



(e) Product Liability Insurance. The Seller shall deliver written confirmation to the
Buyer that it has obtained the insurance policy set forth in Section 4.2(l) of this Agreement.



(f) Possession. At the Closing, the Seller shall deliver to the Buyer exclusive
possession and occupancy of the Leased Real Property and exclusive possession of all other Assets.



ARTICLE VI




ACTIONS AFTER THE CLOSING




6.1 Cooperation. Subject to the confidentiality obligations arising under Section
7.1, for a period of five (5) years from and after the Closing Date, each Party will furnish or
cause to be furnished to the other Parties, and their counsel and accountants, upon reasonable
request during normal business hours, after prior written notice of a number of days reasonable
under the circumstances, such information and assistance relating to the Seller or the Business
(including the cooperation of officers and employees and reasonable access to books, records and
other data and the right to make copies and extracts therefrom) as is reasonably necessary to: (a)
facilitate the preparation for or the prosecution, defense or disposition of any suit, action,
litigation or administrative, arbitration or other proceeding or investigation (other than one by
or on behalf of one of the Parties against any of the other Parties); (b) prepare and file any tax
return or election relating to the Seller and any audit by any taxing authority of any returns
relating to the Seller; and (c) prepare and file any other documents required by governmental or
regulatory bodies. The Party requesting such information and assistance shall reimburse the other
Party for all reasonable out-of-pocket costs and expenses incurred by such Party in providing such
information and assistance.



6.2 Record Retention. The Buyer shall preserve and keep the books and records of the
Seller that the Buyer obtains pursuant to the transactions contemplated hereby, and the Seller and
the Shareholder shall preserve and keep any such books and records they may retain with respect to
the business of the Seller, for a period of five (5) years from and after the Closing Date or for
any longer period: (a) as may be required by any federal, state, local or other governmental body
or agency or any contract or agreement; (b) as may be reasonably necessary in respect of the
prosecution or defense of any suit, action, litigation or administrative, arbitration or other
proceeding or investigation that is then pending or threatened; or (c) that is equivalent to the
period established by any applicable statute of limitations (or any extension or waiver thereof)
with respect to matters pertaining to taxes. Such records shall be made available to the Seller
and the Shareholder or the Buyer, as the case may be, in accordance with Section 6.1. If any Party
wishes to destroy any records referred to herein after that time, it shall first give forty-five
(45) days’ prior written notice to the other Parties, and the other Parties shall have the option,
upon written notice given to the Party providing the initial notice within such forty-five (45)-day
period to take possession of such records within thirty (30) days after the date of its notice
requesting the same.



6.3 Further Assurances. Each Party shall cooperate with the others and execute and
deliver, or cause to be executed and delivered, all such other instruments, including instruments
of conveyance, assignment and transfer, and take all such other actions as may reasonably be
requested by the another Party from time to time, consistent with the terms of this Agreement, in
order to effectuate the provisions and purposes of this Agreement.



6.4 Expenses. The Buyer, the Seller and the Shareholder shall each bear their
respective fees, commissions and other expenses incurred by them in connection with the negotiation
and preparation of this Agreement and in preparing to consummate the transactions contemplated
hereby, including the fees and expenses of their respective counsel, accountants and consultants.
The Seller and the Shareholder shall be jointly and severally responsible for the payment of all
Taxes (including any state sales taxes and any real property or personal property transfer and use
taxes), relating to the transfer of the Assets from the Seller to the Buyer pursuant to this
Agreement.



6.5 Transition Services. Seller or the Shareholder shall perform or cause their
Affiliates to perform the services set forth on Schedule 6.5 (the “Services") at the cost
set forth on Schedule 6.5. The Services shall be provided for One Hundred and Twenty (120)
days after the Closing. Seller and the Shareholder shall and shall cause their Affiliates to use
their best efforts to provide the Services in a manner which is consistent with past practice as
such Services were provided to the Business prior to the Closing Date. Seller and the Shareholder
shall and shall cause their Affiliates to perform the Services using substantially the same level
of care and diligence they use in performing similar tasks in their own businesses.



6.6 Guarantee. From and after the date of this Agreement, Parent hereby irrevocably,
absolutely and unconditionally guarantees the due and punctual payment of all amounts required to
be paid by Buyer under this Agreement when the same shall become due and payable, according to the
terms hereof. This guarantee shall be a continuing guarantee and shall remain in full force and
effect until, and Parent’s liability under this guarantee shall terminate upon, payment in full of
all such amounts by Buyer. Parent hereby expressly waives all (i) presentment, (ii) demands for
payment or performance, (iii) diligence, (iv) demands of protest, dishonor, or reliance thereon,
and (v) protests of non-payment. Parent acknowledges that its obligations under this Section 6.6
shall not be released or discharged in whole or in part by the insolvency, bankruptcy, liquidation,
termination, dissolution, merger, consolidation or other business combinations of Buyer.



ARTICLE VII




NON-COMPETITION AGREEMENT




7.1 Non-Competition.



(a) The Parties recognize that the value of the Business being purchased by the Buyer is
dependent upon the particular method in which the Seller and the Shareholder have conducted the
Business and the contacts of the Seller with its customers and that the Buyer is entering into this
Agreement with a view toward that value. Accordingly, neither the Shareholder nor the Seller shall,
for a period of five (5) years from and after the Closing Date, directly or indirectly:



(i) Have any interest (financial or otherwise) in, or accept employment from, or serve in any
capacity (such as owner, investor, principal, agent, consultant, partner or otherwise) with, any
Person (other than the Buyer) which is engaged in the Business as conducted by the Seller at any
time prior to the Closing any place in the world; provided, however, that
Shareholder may continue to operate News/Sports Microwave Rentals, Inc. (“NSMR”) in the manner that
such company is operated on the Closing Date, but may not expand the business of NSMR in a manner
that would violate the provisions of this Section 7.1.



(ii) Sell to or solicit purchases of products of the Business which are sold by the Buyer to
customers who were customers of the Seller at the time of the Closing or since December 31, 2003.



(iii) Initiate any contact with any employee of the Buyer for the purpose of hiring that
employee in any capacity.



(b) The Seller and the Shareholder acknowledge that the identity of the customers of the
Seller, the engineering drawings and know-how of the Seller and the pricing policies, sales and
marketing strategies, employee training practices and other operating practices and information of
the Seller are confidential and valuable proprietary information of the Seller. The Seller and the
Shareholder will not disclose the identity of the customers, the engineering drawings and know-how
of the Seller or the sales policies, strategies and employee training and operating practices of
the Seller to any Person unless permitted in writing to do so by the Buyer. The Seller and the
Shareholder will transfer to the Buyer at the Closing, and will not retain, any copies, documents,
manuals, summaries, memos, notes, computer programs, disks or database information in any form
containing any of the above described customer identities, engineering drawings or know-how,
policies, strategies or employee training or operating practices and information.



(c) The Seller and the Shareholder recognize that their failure to comply with the provisions
of this Section 7.1 shall cause irreparable harm to the Buyer and that money damages alone would be
insufficient to compensate the Buyer. The Seller and the Shareholder therefore agree that any
court having jurisdiction may enter a preliminary or permanent restraining order or injunction
against either or both of the Shareholder and the Seller in the event of any actual or threatened
breach of any of the provisions of this Section 7.1. Any such relief shall not preclude the Buyer
from seeking any other relief at law or equity with respect to any such claim.



(d) If any provision of this Section 7.1 is deemed to be in violation of any law or
unenforceable for any reason, the remainder of this Section 7.1 shall remain in full force and
effect and shall continue to be binding upon the Seller and the Shareholder, and the court shall
substitute a reasonable, judicially enforceable limitation in place of the unenforceable provision
in order to serve the intent of the Parties as expressed herein and the reasonable business needs
and expectations of the Buyer in purchasing the Assets.



(e) The covenants of the Seller and the Shareholder in this Section 7.1 are not intended to
supersede any covenant in any other agreement that they may enter into with the Buyer. The
covenants in this Section 7.1 are given by the Seller and the Shareholder in partial consideration
for the purchase of the Assets, and the covenants in this Section 7.1 shall be cumulative with any
covenants given pursuant to any other agreement that the Seller and the Shareholder may enter into
with the Buyer.



ARTICLE VIII




INDEMNIFICATION




8.1 Survival of Representations, Warranties and Covenants. All representations and
warranties contained in this Agreement shall survive the Closing until March 31, 2010, on which
date they shall automatically terminate and be of no further force or effect; provided,
however, that outstanding claims pursuant to the representations and warranties of one of
the Parties shall not be affected by such termination; and provided further,
however, that the representations and warranties contained in Section 2.1(l)
(Environmental Matters), Section 2.1(f) (Taxes) and Section 2.1(w) (Title to
Assets) shall survive the Closing without any limitation as to time. Unless otherwise specifically
set forth herein, all of the covenants contained in this Agreement to be performed or complied with
at or after the Closing shall survive the Closing without any limitation as to time.
Notwithstanding anything in this Agreement to the contrary, no claim for indemnification or
otherwise with respect to the breach of any representation or warranty or failure to perform or
comply with any covenant contained in this Agreement may be brought, and no litigation with respect
thereto commenced, and the Party making such representation, warranty or covenant shall have no
obligation with respect thereto, unless written notice thereof shall have been delivered to the
Party against whom a claim for indemnification is sought to be made on or before the expiration of
the survival period with respect to such representation, warranty or covenant.



8.2 Indemnification by the Seller and the Shareholder. Subject to Section 8.1 and
Section 8.6, the Seller and the Shareholder shall, jointly and severally, indemnify and hold
harmless the Buyer, the Parent and their representatives, stockholders, controlling Persons and
Affiliates from any and all Liabilities, losses, claims, damages, incidental, consequential,
punitive, exemplary and other similar damages, diminution in value, costs and expenses (including
reasonable attorneys’, consultants’ and accountants’ fees and other expenses and costs of
litigation) paid by the Buyer or which the Buyer is obligated to pay, whether or not involving a
third party claim (collectively, “Losses”), arising out of or resulting directly or indirectly from
or in connection with:



(a) Any breach or inaccuracy of any representation or warranty of the Seller or the
Shareholder contained in this Agreement, the Schedules or Exhibits attached hereto or any
agreements, documents or certificates delivered by the Seller or the Shareholder pursuant to this
Agreement (it being agreed that any materiality or Material Adverse Effect qualification in a
representation or warranty shall be disregarded in determining whether any such representation or
warranty has been breached and in determining the amount of Losses resulting from such breach);



(b) Any breach or violation of any covenant, obligation or agreement of the Seller or the
Shareholder contained in this Agreement, the Schedules or Exhibits attached hereto or any
agreements, documents or certificates delivered by the Seller or the Shareholder pursuant to this
Agreement;



(c) Any brokerage or finder’s fees or commissions or similar payments based upon any agreement
or understanding made, or alleged to have been made, by any Person with the Seller or the
Shareholder (or any Person acting on their behalf) in connection with the transactions contemplated
by this Agreement;



(d) Any Liability under the WARN Act or any similar state or local law or rule caused by any
action of the Seller or the Shareholder prior to the Closing;



(e) Any Liability arising prior to, on or after the Closing resulting from Seller’s or the
Shareholder’s violation of the Communications Act, the rules and policies of the FCC, or any other
Law, including but not limited to any liability arising from: (i) Seller’s or the Shareholder’s
failure to obtain FCC Equipment Authorizations for any of Seller’s products (in existence prior to
the Closing) which require FCC Equipment Authorizations under the Communications Act and the rules
and policies of the FCC; (ii) Seller’s or the Shareholder’s failure to obtain any other FCC
license, permit, authorization or approval required under the Communications Act and the rules
and policies of the FCC; (iii) Seller’s or the Shareholder’s use or operation of any equipment or
facilities authorized under any FCC license, permit, authorization or approval in a manner which is
not in accordance with Law, including the Communications Act and the rules and policies of the FCC
(including but not limited to any violation of the Communications Act or the FCC’s rules or
policies related to Seller’s operation of the facilities authorized under Local Television
Transmission Service Station KA86394); or (iv) to the extent not covered by (i)-(iii), any
violations by Seller or the Shareholder of the Communications Act or the rules and policies of the
FCC; and



(f) The Excluded Liabilities.



8.3 Indemnification by the Buyer. Subject to Section 8.1 and 8.6, the Buyer and
Parent shall jointly and severally indemnify and hold harmless the Seller, the Shareholder and
their representatives, stockholders, controlling Persons and their Affiliates from any and all
Losses arising out of or resulting directly or indirectly from:



(a) Any breach or inaccuracy of any representation or warranty of the Buyer contained in this
Agreement, the Schedules or Exhibits attached hereto or any agreements, documents or certificates
delivered by the Buyer pursuant to this Agreement (it being agreed that any materiality or Material
Adverse Effect qualification in a representation or warranty shall be disregarded in determining
whether any such representation or warranty has been breached and in determining the amount of
Losses resulting from such breach;



(b) Any breach or violation of any covenant, obligation or agreement of the Buyer contained in
this Agreement, the Schedules or Exhibits attached hereto or any agreements, documents or
certificates delivered by the Buyer pursuant to this Agreement;



(c) Any Assumed Liabilities including but not limited to any Liability arising out of the
operation of the business of the Buyer from and after the Closing Date;



(d) Any brokerage or finder’s fees or commissions or similar payments based upon any agreement
or understanding made, or alleged to have been made, by any Person with the Buyer (or any Person
acting on its behalf) in connection with the transactions contemplated by this Agreement;



(e) Any product liability claims with respect to any products manufactured and sold by the
Buyer from and after the Closing Date;



(f) Any product warranty claims with respect to any products manufactured sold and shipped by
the Buyer from and after the Closing Date; and



(g) Any Liability under the WARN Act or any similar state or local law or rule caused by any
action of the Buyer or the Parent after the Closing.



8.4 Effect of Investigation. The right to indemnification, reimbursement or other
remedy based on the representations, warranties, covenants and obligations contained in this
Agreement shall not be affected by any investigation (including any tax or environmental
investigation or assessment) conducted, or any knowledge acquired (or capable of being acquired) at
any time, whether before or after the execution and delivery of this Agreement or the Closing Date,
with respect to the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant or obligation.



8.5 Claims.



(a) Any Party seeking indemnification hereunder (the “Indemnified Party”) shall give the Party
from whom indemnification is requested (the “Indemnifying Party”) written notice as soon as
reasonably quantifiable after the Indemnified Party has received notice or knowledge of the matter
that has given or is reasonably likely to give rise to a right of indemnification under this
Agreement. Such notice shall state the estimated amount of any Losses, if known, and the method of
computation thereof, all with reasonable particularity, and shall contain a reference to the
provisions of this Agreement in respect of which such right of indemnification is claimed. The
failure of the Indemnified Party to notify the Indemnifying Party in a timely manner of the matter
in respect of which a right of indemnification hereunder is requested shall not relieve the
Indemnifying Party of its obligations hereunder, except to the extent that the Indemnifying Party
is materially prejudiced thereby.



(b) With respect to any Losses arising from any third party claim (a “Third Party Claim”), the
Indemnified Party shall give the Indemnifying Party written notice as soon as reasonably
quantifiable after receiving notice of any Third Party Claim. The failure of the Indemnified Party
to notify the Indemnifying Party in a timely manner of such Third Party Claim in respect of which a
right of indemnification hereunder is requested shall not relieve the Indemnifying Party of its
obligations hereunder, except to the extent that the Indemnifying Party is materially prejudiced
thereby. The Indemnifying Party shall have the right to control the defense of such Third Party
Claim through counsel of its choice and at the expense of the Indemnifying Party. Throughout the
defense of such Third Party Claim, the Indemnifying Party shall consult with the Indemnified Party,
keep the Indemnified Party reasonably informed of the progress and strategy in respect of such
Third Party Claim and use commercially reasonable efforts to take the Indemnified Party’s input
with respect to the progress and strategy in respect of such Third Party Claim into account. The
Indemnifying Party shall not consent to any settlement, compromise or discharge (including the
consent to entry of any judgment) of any Third Party Claim (except any which requires only the
payment of money by the Indemnifying Party) without the Indemnified Party’s prior written consent
(which consent will not be unreasonably withheld or delayed). Notwithstanding the foregoing, the
Indemnified Party shall have the right to control the defense of all Third Party Claims for Product
Warranty Claims or breach of contract claims under customer contracts brought by customers of Buyer
or by customers of the Business at any time prior to or after the Closing (“Customer Claims”)
through counsel of its choice and at the expense of the Indemnifying Party. Throughout the defense
of such Customer Claim, the Indemnified Party shall consult with the Indemnifying Party, keep the
Indemnifying Party reasonably informed of the progress and strategy in respect of such Customer
Claim and use commercially reasonable efforts to take the Indemnifying Party’s input with respect
to the progress and strategy in respect of such Customer Claim into account.



8.6 Limitations on Indemnification.



(a) Indemnification Threshold. Notwithstanding anything contained in Section 8.2 or
Section 8.3 to the contrary, no Party hereto shall be required to indemnify and hold harmless any
other Party with respect to any Losses arising out of or resulting directly or indirectly from any
of the events or conditions identified in Section 8.2(a) or 8.3(a), unless and until the aggregate
amount of such Losses suffered or incurred by the Indemnified Party exceeds Two Hundred Thousand
and No/100 Dollars ($200,000) (the “Indemnification Threshhold”), at which point the Indemnifying
Party shall indemnify and hold harmless the Indemnified Party for all Losses suffered or incurred
by the Indemnified Party, provided that no Indemnifying Party shall be required to
indemnify or hold harmless an Indemnified Party for any Losses suffered or incurred by an
Indemnified Party in excess of the Indemnification Cap except as provided in Section 8.6(d) hereof.



(b) Calculation of Losses. Losses shall be calculated, as applicable, in accordance
with U.S. GAAP consistently applied.



(c) Indemnification Cap. Except as set forth in Section 8.6(d) below, notwithstanding
anything contained in Section 8.2 or 8.3 to the contrary, the maximum amount of Losses suffered or
incurred by an Indemnified Party in respect of which an Indemnifying Party shall be required to
indemnify and hold harmless an Indemnified Party under this Article VIII shall be $5,200,000 (the
“Indemnification Cap").



(d) Indemnification Threshold and Indemnification Cap Not Applicable to Certain
Matters. Notwithstanding the foregoing provisions of Sections 8.6(a) and 8.6(c), neither the
Indemnification Threshold nor the Indemnification Cap shall apply with respect to any Losses
arising out of or resulting directly or indirectly from: (i) the breach or inaccuracy of any
representation or warranty of Seller and the Shareholder contained in Section 2.1(f) (Taxes); (ii)
the breach or inaccuracy of any representation or warranty of Seller and the Shareholder contained
in Section 2.1(l) (Environmental Matters); (iii) the breach or inaccuracy of any representation or
warranty of Seller and the Shareholder contained in Section 2.1(w)(Title to Assets) or (iv) any
claim by Buyer or Seller, as applicable, for indemnification under Sections 8.2(b), 8.2(c), 8.2(d),
8.2(e), 8.2(f), 8.3(b), 8.3(c), 8.3(d), 8.3(e), 8.3(f) and 8.3(g).



(e) Product Warranty Claims. Notwithstanding any other provision of this Agreement,
Seller and the Shareholder shall be required to indemnify and hold harmless Buyer and Parent with
respect to Product Warranty Claims, but only to the extent the aggregate amount of Losses suffered
or incurred by Buyer with respect to Product Warranty Claims exceeds $40,000.



(f) Tax Effect and Insurance. Amounts required to be paid to and Indemnified Party
for Losses pursuant to Section 8.2 or Section 8.3 as applicable shall be reduced by the tax benefit
actually realized by the Indemnified Party and shall be net of any insurance proceeds actually
recovered by the Indemnified Party for such Losses. Notwithstanding the foregoing, an Indemnified
party shall have no obligation to make an insurance claim for any Losses.



8.7 Limited Remedies. If the Closing occurs, except for remedies based upon fraud and
except for equitable remedies, the remedies provided in this Article VIII constitute the sole and
exclusive remedies for recovery based upon the inaccuracy, untruth, incompleteness or breach of any
representation or warranty contained herein or in any certificate, Schedule or Exhibit furnished in
connection herewith or based upon the failure to perform any covenant, agreement or undertaking
required by the terms hereof.



ARTICLE IX




MISCELLANEOUS




9.1 Execution in Counterparts and by Facsimile. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same instrument, and shall
become a binding agreement when one or more counterparts have been signed by and delivered to each
Party. Any Party may execute this Agreement by facsimile signature and the other Parties will be
entitled to rely on such facsimile signature as evidence that this Agreement has been executed by
such Party.



9.2 Notices. All notices, consents, demands, requests, waivers, appeals and other
communications required or permitted under this Agreement shall be in writing and shall be deemed
to have been duly given: (a) when received by facsimile or similar device, if subsequently
confirmed by a writing sent within twenty-four (24) hours after the giving of such notice; (b) upon
receipt if delivered personally; or (c) on the date of receipt, if sent by FedEx or other
international overnight delivery service; and, in any case, addressed as follows:



If to the Seller or the Shareholder:



The Allied Defense Group, Inc.



8000 Towers Crescent Drive



Suite 260



Vienna, Virginia 22182



Attn: Wayne Hosking



Telephone No.: (800) 847-5432



Facsimile No.: (703) 847-5334



with a copy via same means to:



Baxter, Baker, Sidle, Conn & Jones, P.A.



120 E. Baltimore Street



Suite 2100



Baltimore, Maryland 21202



Attn.: James E. Baker, Jr., Esq.



Telephone No.: (410) 385-8122



Facsimile No.: (410) 230-3801



If to the Buyer:



GMS Cobham Inc.



c/o DTC Communications, Inc.



486 Amherst Street



Nashua, New Hampshire 03063



Telephone No.: (603) 546-2103



Facsimile No.: (603) 546-6965



and:



DTC Communications, Inc.




486 Amherst Street


Nashua, New Hampshire 03063



Telephone No.: (603) 546-2103



Facsimile No.: (603) 546-6965



with a copy via same means to:



	 	 	 	 	 
	Jaeckle Fleischmann & Mugel, LLP

	12 Fountain Plaza, Suite 800

	Buffalo, New York
	 	 	14202	 
	Attn.:
	 	Joseph P. Kubarek, Esq.
	 
	 	Kristen M. Birmingham, Esq.






Telephone No.: (716) 856-0600



Facsimile No.: (716) 856-0432



Each Party shall give prompt written notice to the other Parties of any change of address. No
change in any of such addresses shall be effective insofar as such notices, consents, demands,
requests, waivers, appeals and other communications are concerned, unless notice of such change
shall have been given to the other Parties as provided in this Section 9.2.



9.3 Severability. The terms and provisions of this Agreement shall be deemed to be
severable and, if any provision hereof shall be held invalid or unenforceable by a court of
competent jurisdiction or as a result of future legislative action, such holding or action shall be
strictly construed and shall not affect the validity or effect of any other provision hereof, and
the Parties shall use all reasonable efforts to amend this Agreement in order to effect the
Parties’ original intent with respect to such provision, to the extent practicable.



9.4 Titles and Headings. The titles and headings to the Articles and Sections
contained in this Agreement are inserted for convenience of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement.



9.5 Successors and Assigns; No Third Party Beneficiaries. This Agreement shall be
binding upon and shall inure to the benefit of the executors, guardians, administrators, heirs,
legatees, successors and assigns of the Parties; provided, however, that no Party
shall assign or delegate any of the obligations created under this Agreement without the prior
written consent of the other Parties, except to the extent otherwise expressly contemplated under
the terms of this Agreement. Any assignment in contravention of this Section 9.5 shall be null and
void. No Person not a Party shall derive any rights hereunder or be construed to be a third party
beneficiary hereof. This Agreement shall inure exclusively to the benefit of and be binding upon
the Parties hereto and their respective successors, assigns, executors and legal representatives.



9.6 Incorporation of Schedules. The Schedules and Exhibits attached hereto are
incorporated into this Agreement and shall be deemed a part hereof as if set forth herein in full.



9.7 Entire Agreement; Waivers and Amendments. This Agreement and the Schedules and
Exhibits set forth the entire agreement among the Parties with respect to the purchase and sale of
the Assets and any related transactions, and no representations or warranties have been made in
connection with this Agreement or the subject matter hereof other than those expressly set forth
herein or in the Schedules, certificates and other documents delivered in accordance herewith. This
Agreement supersedes all prior negotiations, discussions, communications, representations,
agreements and understandings, whether oral or written, relating to the subject matter of this
Agreement. The Seller and the Shareholder, on the one hand, and the Parent and the Buyer, on the
other hand, may by written notice to the other: (a) extend the time for the performance of any of
the obligations or other actions of the other; (b) waive any inaccuracies in the representations or
warranties of the other contained in this Agreement; (c) waive compliance with any of the covenants
of the other contained in this Agreement; (d) waive performance of any other obligations of the
other created under this Agreement; or (e) waive fulfillment of any of the conditions to their or
its own obligations under this Agreement. The waiver by any Party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent breach, whether or
not similar. This Agreement may be amended, modified or supplemented only by a written instrument
executed by the Parties.



9.8 Announcements. No press releases, announcements, or other disclosure related to
this Agreement or the transactions contemplated herein will be issued or made to the press,
employees, customers, suppliers or any other Person without the prior written approval of the
Buyer, except for any public disclosure which the Seller or the Shareholder in good faith and on
advice of their counsel believe is required by law, the rules and regulations of the Securities and
Exchange Commission or the rules and regulations of any stock exchange. Buyer shall be entitled to
make press releases, announcements or other disclosures related to this Agreement or the
transactions contemplated herein without consultation with the Seller or the Shareholder.



9.9 Construction. The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event that an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption
or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any
provision of this Agreement.



9.10 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts executed in and to be performed in
that state without regard to its conflicts of laws provisions. Each of the Parties hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of
the State of New York located in the County of New York, and of the United States for the Southern
District of New York for any litigation arising out of or relating to this Agreement or the
transactions contemplated hereby. Each of the Parties hereby irrevocably and unconditionally
acknowledges that service of any process, summons, notice or document by United States registered
mail to the respective addresses set forth herein shall be effective service of process for any
litigation brought against a Party in any such court. Any legal action relating to this Agreement
shall be brought in the courts of the State of New York located in the County of New York, and of
the United States for the Southern District of New York and the Parties irrevocably and
unconditionally waive and will not plead or claim in any such court that venue is improper or that
such litigation has been brought in an inconvenient forum.



9.11 Interpretation. All definitions in this Agreement shall apply equally to both
the singular and plural forms of the terms defined. Wherever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine and neuter forms. As
used in this Agreement, the words “include,” “includes” and “including” shall be deemed to be
followed by the phrase “but not limited to.” As used in this Agreement, the terms “herein,”
“hereof” and “hereunder” shall refer to this Agreement in its entirety. Any references in this
Agreement to “Sections,” “Articles,” “clauses,” “Schedules” or “Exhibits” shall, unless otherwise
specified, refer to Sections, Articles, clauses, Schedules or Exhibits, respectively, of this
Agreement; references to “writing” include printing, typing, lithography and other means of
reproducing words in a tangible visible form; references to agreements and other contractual
instruments shall be deemed to include subsequent amendments, assignments, and other modifications
thereto, but only to the extent such amendments, assignments and other modifications are not
prohibited by the terms of this Agreement; and all references to statutes and related regulations
shall include any amendments of the same and any successor statutes and regulations.



9.12 Confidentiality. If the transactions contemplated by this Agreement are not
consummated, the Parties shall keep confidential all information obtained by them from any other
Party, except such information which:



(a) Prior to February 13, 2008 was already in the possession of such Party or, with respect to
the Buyer, is independently developed after such date by the Buyer without direct or indirect
access to the confidential information;



(b) Is generally available to the public, other than as a result of improper disclosure by
such Party; or



(c) Is made available to such Party on a non-confidential basis from a source other than
another Party.



The Buyer acknowledges that such information will be disclosed only to those of its employees
and representatives of its advisors who need to know such information for the purposes of
evaluating and implementing the transactions contemplated hereby. Notwithstanding the foregoing
provisions of this Section 9.12, the obligation to maintain the confidentiality of such information
will not apply to the extent that disclosure of such information is required in connection with
required governmental or other applicable filings relating to the transactions contemplated hereby,
provided that, in such case, unless the Seller and Shareholder otherwise agree, the Buyer
will, if possible, request confidentiality in respect of such governmental or other filings.



9.13 Set-Off. Upon notice to the Seller and the Shareholder, Buyer may set off any
amount that it may be required to pay to the Seller or the Shareholder pursuant to this Agreement
against amounts owed to Buyer or Parent by Seller or Shareholder. The exercise of such right of
set-off by the Buyer in good faith shall not constitute a default under this Agreement.



9.14 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER;
(B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (C) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY; AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.14.



9.15 Risk of Loss. All risk of loss prior to the Closing with respect to the Assets
shall be borne by the Seller and thereafter shall be borne by the Buyer.



9.16 Definitions.



“Accounts Receivable” shall have the meaning set forth in Section 2.1(m).



“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, such Person; provided,
that, for the purposes of this definition, “control” (including with correlative meanings, the
terms “controlled by” and “under common control with”), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.



“Asset Acquisition Statement” shall have the meaning set forth in Section 1.6.



“Assets” shall have the meaning set forth in Section 1.3.



“Assignment and Assumption Agreement” shall have the meaning set forth in Section
4.1(d).



“Assumed Liabilities” shall have the meaning set forth in Section 1.7.



“Business” shall have the meaning set forth in the Recitals of this Agreement.



“Business Day” shall mean any day other than a Saturday, a Sunday or a day on which
banks in New York City are authorized or obligated by Law or executive order to close.



“Buyer” shall have the meaning set forth in the Preamble of this Agreement.



“CFIUS” shall mean the Committee on Foreign Investment in the United States.



“Closing” shall have the meaning set forth in Section 1.1.



“Closing Date” shall have the meaning set forth in Section 1.1.



“Closing Payment” shall have the meaning set forth in Section 1.4(c).



“Code” shall have the meaning set forth in Section 1.6.



“Communications Act” shall mean The Communications Act of 1934, as amended, 47 U.S.C.
Section 151 et seq.



“Contracts” shall have the meaning set forth in Section 1.3(d).



“Customer Claims” shall have the meaning set forth in Section 8.5(b).



“DSS” means the Defense Security Service of the United States Department of Defense.



“Employment Agreements” shall have the meaning set forth in Section 4.2(g).



“Employee Benefit Plan” or “Employee Benefit Plans” shall have the meaning set
forth in Section 2.1(q)(i).



“Environmental Laws” shall have the meaning set forth in Section 2.1(l)(i).



“Environmental Permit” or “Environmental Permits” shall have the meaning set
forth in Section 2.1(l)(ii).



“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



“ERISA Affiliate” shall have the meaning set forth in Section 2.1(r).



“Escrow Agent” shall have the meaning set forth in Section 1.4(a).



“Escrow Agreement” shall have the meaning set forth in Section 1.4(a).



“Excluded Liabilities” shall have the meaning set forth in Section 1.9.



“Exon-Florio” shall have the meaning set forth in Section 3.10.



“FCC” shall mean the Federal Communications Commission and all of its bureaus and
offices.



“FCC Equipment Authorization” shall mean authorization, pursuant to the Communications
Act and the rules and policies of the FCC, which confirms compliance of radio frequency equipment
with the technical requirements of the Communications Act and the rules and policies of the FCC, in
accordance with the procedures of certification, Declaration of Conformity, or verification.



“Final Order” shall have the meaning set forth in Section 3.4(h).



“Final Working Capital Amount” shall have the meaning set forth in Section 1.10(a).



“Financial Statements” shall have the meaning set forth in Section 2.1(c).



“Governmental Authority” shall mean any transnational, domestic or foreign federal,
state or local, governmental authority, department, court, agency or official, including any
political subdivision thereof.



“Government Contract” shall mean any Contract to or by which (a) any Governmental
Entity, (b) any prime contractor of a Governmental Entity (in its capacity as such) or (c) any
subcontractor with respect to any Contract described in clauses (a) or (b) is a party or is bound.



“Governmental Entity” shall mean any government or any agency, bureau, board,
commission, court, department, official, political subdivision, tribunal or other instrumentality
of any government, whether federal, state or local, domestic or foreign.



“Hazardous Substances” shall have the meaning set forth in Section 2.1(l)(i).



“Indemnification Cap” shall have the meaning set forth in Section 8.6(c).



“Indemnification Threshhold” shall have the meaning set forth in Section 8.6(a).



“Indemnified Party” shall have the meaning set forth in Section 8.5(a).



“Indemnifying Party” shall have the meaning set forth in Section 8.5(a).



“Insurance Claims and Rights” shall have the meaning set forth in Section 1.3(j).



“Intellectual Property” shall have the meaning set forth in Section 1.3(b).



“Interest Period” shall have the meaning set forth in Section 1.10(c).



“Inventory” shall have the meaning set forth in Section 1.3(c).



“Joint Notice” shall have the meaning set forth in Section 3.10.



“Law” or “Laws” shall mean all federal, state, local, municipal or foreign
laws, statutes, ordinances, directives, decisions, by-laws, regulations, and orders, and all other
governmental or administrative laws, statutes, ordinances, directives, decisions, by-laws,
regulations and orders.



“Lease” shall have the meaning set forth in Section 2.1(aa).



“Leased Real Property” shall have the meaning set forth in Section 1.3(h).



“Liability” or “Liabilities” shall mean any direct or indirect liability,
indebtedness, cost, expense, fine, penalty, obligation, guarantee or endorsement (other than
endorsements of notes, bills and checks presented to banks for collection or deposits in the
ordinary course of business), whether known or unknown, accrued or unaccrued, absolute or
contingent, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or
several, due or to become due, vested or unvested, executory, determined, determinable or
otherwise, and whether or not the same is required to be accrued on the Financial Statements.



“LIBOR” means the London Interbank Offered Rate.



“License” or “Licenses” shall have the meaning set forth in Section 1.3(f).



“Liens” shall mean any lien, security interest, mortgage, encumbrance or charge of any
kind.



“Losses” shall have the meaning set forth in Section 8.2.



“Material Adverse Effect” shall mean a material adverse effect on the business,
operations, properties, assets, liabilities, profits or condition (financial or otherwise) of the
Seller as a result of the occurrence or existence of any single event or condition or any series of
events or conditions in the aggregate, other than any such effect resulting from changes in the
state of the economy in general or from changes in federal or state legislation.



“Material Contract or Material Contracts” shall have the meaning set forth in Section
2.1(p).




“NISPOM” means the National Industrial Security Program Operating Manual.




“NSMR” shall have the meaning set forth in Section 7.1(a)(i).



“Parent” shall have the meaning set forth in the Preamble of this Agreement.



“Parties” shall have the meaning set forth in the preamble of this Agreement.



“Party” shall have the meaning set forth in the preamble of this Agreement.



“Pension Plan” shall have the meaning set forth in Section 2.1(q)(i).



“Permitted Liens” shall mean: (i) liens, security interests and other charges and
encumbrances incurred in the ordinary operation of the business of the Seller and which would not
reasonably be expected to have a Material Adverse Effect; (ii) liens for Taxes and assessments not
yet payable; and (iii) liens described in the Guaranty, Pledge Agreement and Security Agreement for
the benefit of Portside Growth & Opportunity Fund (June 2007) to be released as of Closing.



“Person” shall mean an individual, a limited liability company, a joint venture, a
corporation, a company, a partnership, an association, a trust, a division or operating group of
any of the foregoing or any other entity or organization.



“Product Warranty Claims” shall mean claims made with respect to the contractual
warranties extended by Seller relating to products sold by Seller prior to the Closing.



“Proposed Final Working Capital Amount” shall have the meaning set forth in Section
1.10(a).




“Purchase Price” shall have the meaning set forth in Section 1.4.




“Regulations” shall have the meaning set forth in Section 3.10.



“Seller” shall have the meaning set forth in the Preamble of this Agreement.



“Seller’s Facilities” shall mean the real property located at 1916 Palomar Oaks Way,
Suite 100, Carlsbad, California.



“Services” shall have the meaning set forth in Section 6.5.



“Shareholder” shall have the meaning set forth in the Preamble of this Agreement.




“Stock Purchase Agreement” shall have the meaning set forth in Section 1.3(k).



“Subsidiary” or “Subsidiaries” shall mean, with respect to any Person, (i) any
corporation more than fifty percent (50%) of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingency) is owned by such
Person directly or indirectly through one or more Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person directly or indirectly
through one or more Subsidiaries of such Person has more than a fifty percent (50%) equity
interest.




“SSA” means Special Security Agreement.




“Tangible Assets” shall have the meaning set forth in Section 1.3(a).



“Tax” or “Taxes” shall mean all taxes, levies, assessments, charges or fees of
any kind or character, including federal, state, local and foreign income, profits, capital gains,
franchise, sales, use, service, gross receipts, occupation, personal property, real property,
property transfer, lease, capital shares, premium, excise, payroll, withholding, value-added or
goods and services taxes and unemployment insurance premiums, pension plan contributions, estimated
taxes and other governmental charges imposed by the United States or any state, local or foreign
government or subdivision or agency thereof, including any interest, additions to tax and penalties
thereon and all obligatory remittances of withholdings made on behalf of employees and others.




“Third Party Claim” shall have the meaning set forth in Section 8.5(b).



“To Seller’s Knowledge” or other references herein to the Seller’s knowledge or
awareness shall mean: (i) the actual knowledge of Sam Nasiri, Tom Meyers and Ursula Meinhard; (ii)
any information contained in the books and records of the Seller or the Shareholder; and (iii) the
knowledge that any such person referenced in clause (i), as a prudent business person, would
reasonably be expected to have obtained in the conduct of his or her business.




“U.S. GAAP” shall have the meaning set forth in Section 2.1(c).



“WARN ACT” means the Worker Adjustment and Retraining Notification Act of 1988, as
amended.




“Welfare Plan” shall have the meaning set forth in Section 2.1(q)(i).



“Work” shall have the meaning set forth in Section 2.1(l)(iv).



“Working Capital Independent Account” shall have the meaning set forth in Section
1.10(a).



“Working Capital of the Seller” shall have the meaning set forth in Section 1.10(a).




(Signature page follows)



861823.12

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the date first written above.




SHAREHOLDER:


THE ALLIED DEFENSE GROUP, INC.




By:      

Name:

Title:





SELLER:

GLOBAL MICROWAVE SYSTEMS, INC.




By:     

Name:

Title:





PARENT:


DTC COMMUNICATIONS, INC.




By:     

Name: William A. Wescott

Title: Secretary





BUYER:


GMS COBHAM INC.




By:     

Name: William A. Wescott

Title: Secretary





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